The Chancellor of the Exchequer gave his budget statement this afternoon. In reality, there were few surprises with many of the measures having been widely trailed in advance.
While there was no mention of house building or construction in the speech itself, there are some measures that will impact on the industry, specifically on taxation, self-employment and skills and training. There was also the announcement of some relief for small businesses to mitigate the impact of increases in business rates.
Highlights for the property and construction sectors as follows:
Real GDP grew by 0.7% in the final quarter of 2016, with 1.8% growth over the year as a whole. Of the major world economies, only Germany surpassed the UK's growth.
Employment levels reached a new record high.
The OBR's adjusted figures now forecast GDP growth of 2.0% in 2017, 1.6% in 2018, and then 1.7% in 2019, 1.9% in 2020 and 2.0% in 2021.
Inflation is expected to rise to 2.4% in 2017, 2.3% in 2018 before falling back to 2.0% in 2019.
Debt - still huge and won't be disappearing anytime soon.
In addition to the relief package already announced, additional measures include:
- Additional cap for businesses coming out of Small Business Rate Relief
- £1,000 discount on business rates in 2017 for all pubs with an RV of less than £100K. Seems this includes 90% of all pubs in England.
- £300m relief fund available for Local Authorities to address cases of local hardship.
The personal allowance will rise to £11,500 next month.
Self-employment and employment through a limited company will be made less attractive:
- the main rate of Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and to 11% in April 2019 to reduce the gap in rates paid by the self-employed and employees, and to reflect the introduction of the new State Pension to which the self-employed have the same access
- the dividend allowance for limited company directors will be reduced from £5,000 to £2,000 from April 2018, to reduce the tax differential between the self-employed and employed, and those working through a company.
At Blayze Group we have been anticipating changes like these and can advise on the likely impact for employers working with freelancers/contractors.
The government says it is clamping down on tax evasion, and there is specific mention in the supporting documents of fraud in the provision of labour in the construction sector. "The government is consulting on options to combat missing trader VAT fraud in the provision of labour in the construction sector, in particular, applying the reverse charge mechanism so the recipient accounts for VAT."
Good news for the haulage industry as both the VED rates for hauliers and the HGV Road User Levy are frozen for another year.
Next month sees the introduction of the Tax-Free Childcare policy, under which working families can receive up to £2,000 a year towards the cost of childcare for each child under 12.
The scheme will be rolled out to all eligible parents by the end of the year.
From September, working parents with three and four year olds will get their free childcare entitlement doubled to 30 hours a week. Potentially worth around £5,000 a year to a young family with a three year old and both parents working.
A Memorandum of Understanding has been agreed on further devolution for London. This includes the possibility of the GLA having additional power to tackle congestion and a taskforce to 'explore piloting a new approach to funding infrastructure'.
There is a recognition that the UK has a productivity issue and there are some measures to improve education and training.
- creating sector-specific routes to employment, supported by an increase in the number of hours of learning of over 50%, and including a high quality work placement for each student
- fund maintenance loans for students pursuing technical education at higher levels, opening up the same opportunities available to those studying on the academic route
- expand the free schools programme, to give more parents the choice of a good school for their child, and commit an additional £216 million investment in school maintenance
- There was also the announcement of £5m for 'Return to Work' support - to help people who have taken lengthy career back to employment.
No major surprises in this statement, with most of the announcements being well trailed in advance.
If forecast figures are correct, companies should factor in some wage and materials inflation. Those who employ many freelancers should expect to incur some additional costs, but the additional childcare allowances should make it possible to attract more women into the industry - a key factor in growing the industry when there is still an acute skills shortage - and a huge gender imbalance.
Investment in education and training is always welcome, but this will be too late to the ameliorate the current skills shortages. In the present climate of effective full employment, an ageing workforce and a high level of competition for the available talent pool, imaginative solutions to hiring problems will be required.
At Blayze Group we have been working for some time with clients on innovative ways to attract new talent and retain and develop talent within your organisation. As experts in Property and Construction, Blayze Group is uniquely placed to help address the recruitment requirements specific to the sector. If you are facing recruitment challenges, call 0207 3377500 (London) or 0161 3594325 (Manchester) to speak with a Blayze Group expert about the best solution.
Blayze Group was founded in 2002 to address a gap in the market for a relationship orientated search and selection consultancy within the property, engineering and construction sectors.
Today Blayze Group is a leading property and construction recruitment partner working with organisations in Architecture, Accountancy, Business Support, Construction, Energy, Financial Services, General Practice, Technical Surveying and International sectors.
Blayze Group prides itself on taking the time to understand the culture and business of clients and combines this personal service with expert knowledge and experience within the Property and Construction markets to supply the highest calibre candidates.
For more information about Blayze Group search, selection and talent management services visit the company web site at http://www.blayzegroup.com. For a list of current opportunities in Property and Construction, visit the Blayze Group online jobs page.