Small building companies face challenging times ahead, as they grapple with a significant rise in employers’ National Insurance contributions and Capital Gains Tax increases, warns the Federation of Master Builders (FMB) in response to the Chancellor’s Autumn Budget.
Brian Berry, Chief Executive of the FMB, commented: “The Budget was the first opportunity for the new Government to set out its long-term financial plans for the country. In challenging economic conditions, the Chancellor of the Exchequer delivered a mixed Budget with promising plans for the long-term future of the construction industry, however it is likely to present substantial challenges to firms managing their business finances. At a time when SME builders are needing a boost, they may, like many in the country, have to take a hit before they see things get better."
Berry continued: “The Chancellor’s decision to significantly increase employers’ National Insurance contributions will create major headaches for firms looking to take on staff at a time when the building industry is in desperate need of new workers. However, it is good that the Chancellor has shielded small companies by increasing Employment Allowance, as is the rise in the Apprenticeship wage which will help increase the appeal of a career in construction for young people. Capital Gains increases may also hit builders looking to sell off their companies when they look to retire.”
Berry concluded: “The FMB has been calling for more details of the Government’s plans to improve the energy efficiency of the UK’s homes, a key pledge in Labour's election manifesto. The announcement of £3.2bn to fund the Warm Homes Plan will be crucial to getting more SME building companies to enter the retrofit market. The announcement of additional support for SME house builders to access low-cost loans is also welcome, and alongside the announcements on housebuilding made in recent months, offers hope for the future. SMEs have a crucial role to play in plans to get Britain building again, and it is vital that the Government does not lose sight of the challenges the sector continues to face.”
