Press Room
Pre-Budget Report delivers yet another blow to
construction industry
Kathryn Hiddleston, a construction industry expert at Grant
Thornton, says the industry has been dealt yet another blow thanks
to the withdrawal of the NIC exemption relating to holiday pay for
employees within the industry.
Hiddleston says, “The withdrawal of the NIC exemption relating to
holiday pay for employees in the construction industry is another
blow, especially since construction companies were already
struggling to get up to speed with the new construction industry
scheme. The net effect of today’s change means the industry, which
already operates under very tight margins, will have to find up to
a further £150 million per year.”
The construction industry has been given a transitional period
until 30 October 2012 to change their systems and procedures.
Hiddleston says, “It is important to note that the transitional
period only applies to holiday pay paid in respect of employees who
are employed specifically to carry out construction operations and
not any other employees within a construction business. If
construction businesses currently make use of the Holiday Pay
Scheme in respect of all its employees, they will need to change
their ways from 30 October 2007.”
However, the new draft legislation does not stop construction
businesses from implementing a scheme - where it does not currently
operate the arrangement - to realise savings over the next five
years.