Clients Could Face Tax Bills for Choosing Cheap Contractors

​Clients could face a tax of 0.5% of construction costs if they choose contractors who don’t invest in research and development or skills training. This proposal is currently being considered by the government. A review of the Construction Labour Model warned that the industry faces “inexorable decline” unless major changes are made. The review highlighted constructions “dysfunctional training model”, lack of innovation and collaboration and “non-existent research and development culture.

​One of the recommendations was a levy tax on businesses who buy construction work in a way that doesn’t support industry innovation or skills development. Clients could face paying a suggested levy equal to 0.5% of a scheme’s construction cost but would avoid paying this tax completely by commissioning construction in a more responsible way.

“With digital technology advancements pushing ahead in almost every other industry and with the construction labour pool coming under serious pressure, the time has come for action.”

The report stated that “the construction industry is in dire need of change”, it went on to state that after conducting the review, carrying on as we are is simply not an option.
 
The final conclusions of the report expressed the need for innovation, making the work less labour intensive and more attractive to new entrants. Without the innovation it stated that there was a real danger of the construction sector “going into an inexorable decline over the next few years”. The goals of the report are to ensure that all involved consider their role in safeguarding the Construction Industries long term health.