“It was good to see a number of initiatives and issues which have implications for the construction industry addressed in yesterday’s budget.
“First and foremost, the housing crisis – a long debated problem with a host of proposals and plans thrown at it in the last decade – was addressed once again.
The Help to Buy scheme has been extended for two years, with some modifications; it will now be applicable to first time buyers only with regional price caps on eligible properties. We hope this will both continue to help people get on to the property ladder and provide a boost to the housing sector.
“The additional £500m of funding promised to the Housing Infrastructure Fund was also welcome, confirming the Government’s commitment to tackling the housing shortage by unlocking 650,000 homes.
“The introduction of a permanent tax break for new commercial buildings is also very encouraging.
“This will represent a 2% tax write-off per annum of construction costs for those holding and investing in commercial buildings. Effectively, making it possible to write off costs at 2% over a 50-year period.
“The initiative to rejuvenate local high streets is also very welcome; £675 million to improve transport links, re-develop empty shops as homes and offices and restore and re-use old and historic properties will all have a positive impact on the construction sector.
“As will the further changes to the apprenticeship levy which were mooted to support employers. In a sector suffering hugely from a skills gap, apprenticeships are a great opportunity to encourage new life blood into the industry. From April, large businesses will be able to invest up to 25% of their apprenticeship levy to support apprentices in their supply chain – something which could be of real benefit to smaller contractors.
“So good news for apprenticeships, but there are potentially some clouds on the horizon for contractors and freelance workers in the industry.
“The Chancellor’s announcement that the government will be extending IR35 from the public sector to include those working for private firms could have a serious impact on contractors. The tighter tax rules, designed to sieve out the genuinely self-employed from those who are actually employees, will come in from April 2020. The higher tax and National Insurance contributions could well squeeze cashflow and make it more important than ever to keep an eye on company accounts and balance sheets.”