The construction industry must adapt to several changes in the legislation in the UK. Various laws relating to taxes, climate change, Brexit and fire safety are to be enforced in 2021. Here’s how these changes will affect the construction sector.
Tax: Changes to IR35
The government introduced changes to the IR35 legislation or the off-payroll working rules earlier in 2020. They were scheduled to come into effect on 6 April 2020 but were postponed to April 2021 due to the pandemic. The new regulations were postponed to help businesses and individuals deal with the short- and long-term impacts of the virus and are currently scheduled to be enforced as planned. Once the changes are introduced, certain freelancers, contractors and other workers will be deemed as employees on the payroll. Businesses that fail to exercise reasonable care in determining the IR35 tax status of a contractor could face significant fines.
For businesses and individuals looking to prepare for these legislative changes, the government has released official guidance here.
Brexit: EU (Withdrawal Agreement) Bill
Another major legislative change for the industry to adapt to in 2021 is the EU Bill post-Brexit. After the UK left the European Union on 31 January 2020, there was a transition period until 31 December 2020. Now that the transition period has ended, construction companies need to check how the new rules affect them specifically. To help with this, the government released a Brexit Checker so that companies could understand how the various new regulations would apply to them.
Companies that import or export construction materials and resources must apply for an EORI number. They should check to see which goods imported into Great Britain from the EU are controlled and read the guidance published by the government with regards to imports and exports between the UK and the EU.
Companies recruiting workers from the EU need to register as a licensed sponsor if they want to hire eligible people from outside the UK. The government has described the entire process here.
Construction companies selling services to the EU, Switzerland, Norway, Iceland or Liechtenstein should scrutinise the national regulations of the relevant country so that they understand how to carry out the business. The government has released guidance to help companies with these changes here.
The complete guide to help the construction industry adapt to the various changes post Brexit can be found here.
Building a Safer Future
The ‘Building a Safer Future’ consultation was published in June 2019. It suggests long-term reforms to make the construction industry safer and to increase transparency and accountability. The reforms aim to improve the performance of buildings as well as the management of structural and fire safety risks in new and existing buildings. Construction companies should start implementing these guidelines now to make the future transition smoother.
The report proposed that qualified duty holders are appointed. These individuals will be responsible for making sure that buildings are safe throughout the different stages of their lifecycle. The report also introduces the concept of a golden thread of information in the industry, which is aimed at increasing accountability and transparency. The golden thread is an up-to-date digital record of all building data, which is managed and maintained throughout the lifecycle of a building. It can be accessed by any stakeholder at any time. Read the ‘Building a Safer Future’ report here.