James Talman, Chief Executive of NFRC, outlines the key points roofers should be aware of following the Chancellor’s recent Winter Economy Plan announcement, and explains where he feels the Chancellor should go further.
With the government’s focus now very much on dealing with the rapid rise in Covid-19 cases, there will not be a Budget this year. The Chancellor did, however, recently announce a ‘Winter Economy Plan’.
Here are the key areas that roofing contractors should be aware of:
Deferred VAT payment can now be paid over 11 months but no change on the Reverse Charge
While it was a welcome relief when the government initially allowed companies to defer VAT payments this year due to the impact of Covid-19, it did mean there was going to be a crunch point in March 2021 where a large lump sum of deferred VAT payments was due to be paid at the same time as Reverse Charge VAT is expected to kick-in.
The government has since seen sense and will now allow the deferred VAT payments to be paid over 11 instalments instead of in one lump sum. This will be a great benefit to the cashflow of many roofing firms, but the Treasury has not budged on Reverse Charge VAT.
We are still calling on the government to reconsider, especially at this time of uncertainty, but roofing contractors should start preparing for the changes coming next March now.
New Job Support Scheme to replace furlough
The Job Retention Scheme and Self Employment Support Scheme Grant (SEISS) were a great benefit to the construction industry, and roofing industry in particular, with just under half (48%) of roofers having been furloughed at some point during the pandemic.
However, the Chancellor has made clear that furlough in its current form will not continue and instead a new ‘Job Support Scheme’ will be introduced in its place from 1st November. This will aim to protect ‘viable’ jobs in businesses where there may be lower demand over the winter months.
Under this scheme employers will continue to pay workers for the hours they work, but for the hours not worked, the government and the employer will each pay a third of the employee’s equivalent salary. The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 a month.
For the self-employed, the government has extended the Self Employment Income Support Scheme Grant for those who are currently eligible for this scheme but continue to face reduced demand due to Covid-19. The initial grant will cover 20% of three months’ worth of profits from November to the end of January 2021, capped at a total of £1,875.
The roofing industry is booming at the moment, so hopefully this won’t have to be used by many at present – but it will provide peace of mind to those who may need it.
Flexibility on Covid loan repayments
Those roofing contractors that have taken out ‘Bounce Back or ‘CBILS’ loans will now have the option to repay these loans over a period of up to 10 years. For ‘Bounce Back’ loans, interest-only periods of up to six-months and payment holidays will also be available to businesses.
The Chancellor also announced that both of these loan schemes will remain open for businesses to apply for them until the end of November.
We think the government should look to extend these loans even further to support businesses who may experience cashflow difficulties.
Attention must now turn to economic growth
There was much to welcome for roofing contractors in the Chancellor’s speech – but many will be asking whether that is all. While the industry is busy now, many contractors are concerned about workloads in the New Year and now is the time for government to be thinking of how to maintain demand.
What is needed is some radical thinking from the Treasury on stimulating the economy in the longer term. With rising unemployment, the government needs to consider how to redeploy and reskill unemployed workers into sectors that are growing such as roofing. That’s not to mention policies on how we are going to achieve our net-zero target by 2050 – our sector is primed to help the government reach this target, but policy interventions will be needed.
We’ve got our own ideas we are developing, but if you have any ideas you would like us to pass on the Treasury do let me know on the details below:
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