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Freelance Builder Pay Trends: May 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

April is traditionally a month that heralds a ‘Construction Spring’:  the green shoots start to show as new budgets are agreed and the spend for the year ahead is agreed.

But this year is different.  Earnings across all five Hudson Contract regions are down, possibly due to the fact that the UK had almost double the amount of average rainfall during April – causing the weather to postpone spring for another four weeks, at least.

This month’s figures also highlight a disparity in certain trades from one region to another.  For example:

• Those involved in demolition in the North East average £298 a week, while their counterparts in the North West are on almost double at £591

• Electricians in the South West are poor neighbours compared to those in North West with average earnings of £572 and £833 respectively

• Looking across all regions, eight out of the 17 trades we monitor have a disparity of over £200

Bridging the earnings gap An interesting trend emerges when we look back over the past three Aprils.

Hudson Contract Managing Director David Jackson comments:  “As you would expect, the consistent factor is that average earnings are always highest in South East England.  But take a look at the table, and see how the gap has narrowed.

“Over the course of twenty-four months, the earnings differential between the South East and the North has plummeted by nearly 70%. I wonder if it is a case of freelance builders from the north moving south to get work and taking their average pay rates with them, or if the squeeze on costs is gradually being more evident in the South East?  Whatever the reason, it’s an interesting trend, and one we will continue to monitor.”

click here to see this month’s paystats

And the winners this month are…

Day after day, Hudson Contract’s Rewards Programme keeps giving away significant amounts of money.

Here is round-up of some of the latest Rewards we’ve handed out:

Karen Harkin, boss of Solihull-based Harkin Construction, earned £610 for referring a business to us. Our Sales Director Richard Crisp presented a cheque to Karen’s daughter Sarah, who said: “With a new baby on its way, the money could come in really handy but the final decision will be left to my mother. Happily, she’s also a doting grandma!”

Surjit, of Nijjer & Co accountants, in Kent, is no stranger to Hudson Contract Rewards as he has referred several clients to us already. “This latest cheque is going towards upgrading my business computer equipment,” he says.

Surjit belongs to a select – and growing – group of accountants who always recommend their construction-based clients to use Hudson Contract to engage their labour-only subbies. “It’s because we know that when we refer them, we are certain they will receive a good service, and be using guaranteed, legally proven contracts. That reflects well on me as an accountant. The Rewards are nice, but they are a bonus, rather than a reason to refer clients.”

Other happy Reward recipients include Amelia and Sally from a construction firm based in Derby. Their cash is going to be spent on either a champagne dinner or spa treatments – the decision is hanging in the balance!

Why not see if you can be our next Rewards winner?

It’s easy. There’s just two steps:

1. Just click here to fill in the details of the business you’d like to refer

2. Let them know you’ve give Hudson Contract their details, so they’re already expecting to hear from us

You earn £50 for EVERY operative engaged by Hudson Contract as a result of your referral – paid after ten weeks of transacting. There’s no limit to the number of times you can refer. And there’s no ceiling on the value of the Reward you can win.

What are you waiting for? Get out your contacts book and click here to refer now!

Hudson Contract appears in the Yorkshire Post

David Jackson, Manging Director of Hudson Contract appeared in Tuesday 24th April 2012 issue of the Yorkshire Post. Read the full story here

Recession: Are we talked into it? Or digging our way out of it? And how about the five per cent solution?

Yes we are talked into recession.  And Yes – we are indeed – digging our way out of it.   Or at least that’s my view from the unique perspective of having a nationwide  client base in the construction sector.

Like everyone else, I was dismayed to learn we are back in recession, at least for now and according to the Office for National Statistics.  But should we really believe all their figures suggest?

My experience of the ONS comes from the monthly return we are obliged to make as part of the service sector.  But what about those in the building sector?  Are second and third tier construction bosses genuinely able to confirm their business performance in a form filling or telephone reporting criteria, requiring them to provide accurate performance data when they are already grappling with the problems of the day?

I hope the ‘early estimate’ that has led to this fresh cry of ‘Recession!’ proves wrong.

Apparently 8,000 construction sector responses were “checked and double checked” to compose the picture.

The ONS commented:  “The huge cuts in public spending, 25% in public sector housing and 24% in non-public housing with a further 10% cuts to both sectors anticipated in 2013 have left a hole too big for other sectors to fill.”    An unintended pun no doubt, but a reduction in Government capital expenditure we all knew was coming.

According to the ONS headline figure, construction decreased by 3% quarter-on-quarter.  I checked this against Hudson Contract’s own data, and can confirm that while the peak number of freelance builders paid between January and March fell by 3.7% from the previous quarter, the overall amount paid to freelance builders actually increased by 8.7% in the same period.

So to look at it another way… if recession is measured by the productive output of labour-only subbies, then this is the start of a boom for the industry:  HEADLINE NEWS!   

At an anecdotal level, speaking to three of our clients in the civil engineering sector, two have confirmed they intend to increase their freelance workforce to keep up with increased demand, whilst one is still “trimming the ship”. Moreover, some of our ground-working clients have indicated their books look good for the year.  Or as one firm jubilantly reports:  “We have never been so busy!”  This firm currently has 90 freelancers on our contracts and is being pressurised by its clients – who include Taylor Wimpey and Barratts – to provide additional labour.

The first sign of recovery in construction surely is when slabs start appearing on house building sites.

So perhaps the Government would do well to focus on the freelance element within the construction sector for a growth strategy – and be sufficiently bold to reduce VAT to 5% for repairs and renewals on the housing sector.

Now that really could kick start the recovery…

Freelance Builder Pay Trends: April 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

For the first time in three months, average earnings are up across every region. Not by much – just half a percent across the country – but at least it’s a step in the right direction.

Hudson Contract’s latest figures reveal:

• Mixed fortunes amongst the various trade groups – with room for cautious optimism. 54% of trades across the country earned more this month, and of these, almost 40% are now earning about ten per cent more than they were three months ago.
• Joiners are in demand, with pay rates consistently up across the country, ranging from a 0.41% increase in the South-East to an extra 22% in the South-West. Although having said that, joiners were, in fact, the worst paid trade group in the South-West, earning £458 as against a weekly average of £634.
• Freelance builders in the South-East are better paid than their regional counterparts, with average weekly earnings of £670.
• Shopfitters in the South-West are the only regional trade group with four-figure earnings: £1,128 a week.

There is also good news from the latest Markit/CIPS Construction Purchasing Managers’ Index, published at the end of March. The numbers echo the positive trend, reporting:
1. New orders are rising fastest than at any time since September 2007.
2. Growth in the industry has been maintained for a six month period.

The Office for National Statistics has also just published its state-of-the-construction-industry figures. These paint a slightly different picture, reporting that output has fallen in both the new work and repair and maintenance sectors for the six months to January 2012, and that year-on-year, output is also down by 2.3%.

So which figures should you believe? Hudson Contract Managing Director David Jackson confesses: “I think the key message that comes out of these industry reports is that frankly, we don’t know. There is continuing uncertainty across construction, especially when you consider that even when new orders have been won, there is often a substantial lead time before the work is actually started.

“Then again, we have just had the best March weather for many years, and as we all know, that means greater opportunities to work. So yes, it’s encouraging to see earnings rising, but it’s too soon to hope for a trend – it’s very much watch this space.”

click here to see this month’s paystats

Guess who’s coming to breakfast: Could it be YOU?

Hudson Contract’s Breakfast Seminar experiment has proved to be an enormous success, and as the programme enters its second year, we are keen to involve our clients – especially as it gives you the opportunity to make extra revenue.

The idea started with various high profile accountancy and health and safety firms inviting their construction clients to meet us for a briefing on tax and employment law.

The Breakfast Seminars turned out to be a win-win-win for delegates, the hosts and Hudson Contract. And that’s why we’ve decided to like to extend the offer to other firms too.

If you are part of local construction business development group, a network of accountants, or someone who’s up to the challenge of hosting a gathering of 20 or so of your own construction contacts to an event, let us know.

“The presentation on the Hudson Contract solution is one not to be missed by any business involved in the construction industry. Their offering could save you thousands and they even give a guarantee”
Sexty & Co Chartered Accountants, Norwich

Here’s what happens at a Breakfast Club Seminar:

Your guests get a short but thorough briefing on the complexities of current tax and employment law, from the perspective of being able to safely engage self-employed workers.

As a finale to the presentation, Hudson Contract offers a free contract health check to every construction firm. This is effectively a business risk assessment, and we provide a written report to let them know if they have any tax or employment vulnerabilities.

Upcoming Seminar Dates
We’ve already got four events scheduled, and if they happen to be geographically convenient, we hope you’ll recommend them to friends and associates.

• Leeds: 19th April
• Sandwell: 10th May
• Birmingham: 17th May
• Tamworth: 14th June

For further details or to recommend someone who might find the Seminar useful please contact Fiona Pollin on 01262 401040 or fiona.pollin@hudsoncontract.co.uk

If your delegates becomes Hudson Contract clients (and frankly, the take-up is high), our Cash Rewards Scheme kicks in, and you can earn £50 for every operative engaged by us. You’ll find full details at http://www.hudsoncontract.co.uk/benefits/hudson-rewards

Interested in hosting a Breakfast Club Seminar:
Fiona Pollin is also the person to contact to find out more about hosting an event – or having us attend your event.

Oh, and it doesn’t always have to be held at breakfast time! Whatever works for you probably works for us, too.

Tax investigation ‘insurance’ leaves electrical contractor with £11,000 HMRC bill

Hudson Contract’s Ian Anfield – our Contracts Director – recently visited a small family-run electrical contracting business on a fire-fighting mission, in a bid to help solve an ongoing employment status argument.

The case is a warning for every construction business that has invested in ‘tax investigation insurance’ and believes it is therefore immune from the financial consequences of an HMRC status investigation.

Ian takes up the story.

“The company is based near Sunderland. It’s got a pool of about twenty self-employed electricians, so it can pick and choose the freelance labour it needs on a project by project basis. The electricians like the arrangement as it enables them to carry out other work for themselves, and a couple of the guys even live abroad, returning only when a project takes their fancy.

“Everything was going nicely until last September, when HMRC carried out a Contractor Records Check. This was attended by the owner of the company and his accountant who by his own admission is ‘not well up’ on CIS. But the accountant wasn’t not too concerned as he was able to call upon a third party with whom he had taken insurance – paid for by the contractor – to deal with tax investigations.

“Insurance like this is frequently recommended by accountants who act in good faith. But as this story shows, this can turn out to be heavily misguided when push comes to shove.

“In this case the third party ‘tax expert’ was so slow off the mark that HMRC gathered all the evidence they required by reviewing the CIS returns, interrogating the contractor and speaking to one of the self employed electricians before they heard a word.

“As a result, the contractor faces an £11,000 penalty based on the reclassification of two electricians for a single tax year. What’s more, HMRC are making it clear that unless the matter is settled quickly, they will look at other electricians and previous years.”

As for the third party ‘tax expert’… the insurance firm involved has not yet even decided whether or not the contractor is covered by the terms of the insurance and has done nothing whatsoever to help!

“Hudson Contract has given some advice that will limit the damage, and the case rumbles on. At least the decision to move the guys to us has put a lid on the issue and halted any growing liabilities.

“From the outside looking in, the contractor has been badly let down, starting with the lack of preparation for the first meeting with HMRC.

“I’m sorry to say it’s not the first time I’ve been involved in a story like this. It’s a classic case of risk mitigation going wrong, and further evidence that the only legally proven belt-and-braces way of eliminating status issues is to become a Hudson Contract client.”

Hudson Contract bucks the business trend: 18% growth in the past 12 months

It’s been a tremendous year here at Hudson Contract, where I’m proud to say our business has continued to flourish, growing by 18 per cent in the space of twelve months.

During that time, another 375 construction firms have chosen to join – or rejoin – the Hudson Contract ‘family’ of clients. I’d like to say a personal thank you to each and every one: I appreciate the choice you have made to engage us, and hope we can continue to help you deliver the vital competitive edge that’s needed to prosper in the coming year, despite the challenging circumstances of the marketplace.

On a less buoyant note, our overview of the industry gives us a perspective of the construction ‘casualty rate’ across England and Wales, and I’m sorry to have to report there’s been no slowdown of the rate at which firms are being forced out of business. This last year has seen 77 clients forced to close their doors (4.16%). A further 39 became obsolete (2.11%) and in all, 280 Hudson Contract clients (15.4%) have experienced reduced order books to the point where they are not currently engaging any freelance builders as part of their workforce.

The good news by numbers:
• On the operative front, we have received 20,023 incoming contracts during the year which averages at around 80 per day. For each operative, we validate the details of the contract and declaration before chasing any clarification needed. We then verify each operative with HMRC to determine the tax treatment before entering details onto our payroll database. Each week we pay the operatives, most get a text from us to confirm their net earnings and every month, a written statement confirming earnings and tax deducted is sent by post

• A staggering 598,989 individual payments were made. Every last payment was made on time, and in accordance with our client’s instructions. It continues to be a source of great pride that Hudson Contract has never – ever – missed a payment

• Twenty-eight individuals have disputed the terms of their contract or the validity of their self-employment status. And why is that good news? Because in line with the Employment Guarantee that every client receives, we took ownership of each case. Following initial correspondence, thirteen operatives entered a claim into the Tribunals service. And all of them either failed to prove a case or withdrew their claims before a hearing. Hudson Contract’s unblemished Employment Tribunal track record continues…

As I look forward to a new year, the most satisfying thing for me is the ongoing certainty of the delivery of the Hudson Contract service, in that the contractual circumstance we established in 1996 – which bound HMRC into acceptance at the High Court in 2006 – remains absolute.

Or to put it in less formal terms, when it comes to HMRC status enquiries, Hudson Contract clients are bulletproof.

We never forget that it’s our clients who determine our success, and I’d just like to take this opportunity to thank you all for continuing to trust us to act on your behalf to deliver an assured – and secure – Contract and Payroll Service. I give you my word that we will never become complacent, and that it is our intention to continue and improve our customer service to ensure we remain the provider of choice to our clients nationwide.

Thank you for choosing to do business with Hudson Contract.

Freelance builders boost the UK economy – a billion times over

I was able to consider some CIS returns recently, and the figures make fascinating reading in terms of the value to the Treasury of labour-only subbies in the construction workplace.

The returns were for earnings made in the 2010/11 tax year for 575 subbies, which is a sufficiently large sample size to extrapolate figures for the entire sector.  Moreover, they were completed by a firm of chartered accountants, making the numbers credible and reliable.

By way of further background, the 575 returns were for freelance builders living and working throughout the UK who responded to a marketing message offering a professional service to ensure a complete end-of-year tax return. All expenses claimed on the returns were done so in accordance with approved professional accounting practices  

The key facts determined are:

•  The average tax refund for freelance builders with a full year’s self-employed earnings was £1,395

•  Just over 90% of the operatives were due a refund, while fewer than 10% had a tax liability

•  The average time spent waiting for the refund was around eight months from 6th April 2011.  

And here’s what these facts suggest:

•  The Office of National Statistics says there are approximately 720,000 self-employed people working on building sites. Further analysis from HMRC suggests around 17% supply materials and the remainder attend to provide services with their skills and the tools of their trade. So that gives us 597,600 labour-only subbies.

• If the 10% that have a tax liability are cancelled-out by 10% who obtain refunds, that could mean 80% of the 597,600 are due a refund, the average value of which is £1,395. So the ‘over-deduction’ of tax at source could add up to £667 million.

•  Since refunds are on average claimed six to ten months after the tax year has ended (usually nearer the tax filing deadline the following January) HMRC is all the while building up more cash in hand for the following tax year via deduction of CIS tax at source every month.

•  Or to put it another way, the Revenue holds over a year-and-a-half’s-worth of pending refunds at any one time, meaning there’s an additional £334 million over and above the £667 million of refunds pending.

It adds up to a billion pound cash-in-hand advantage to HMRC.  

Freelance Builders – what would the Treasury do without them? My guess is that they’d have to increase their borrowing by as much as a billion pounds for a start…

Freelance Builder Pay Trends: March 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Love obviously wasn’t in the air in February – at least, not as far as our monthly pay stats are concerned.

Four out of the five regions are again showing a decrease. Only the South-West has managed to buck the trend, and then only by 0.33%, which translates as an extra £8 or so over the month.

Looking at the 17 different trades across our five regions, it’s more of a mixed bag, with 40% earning more, and 60 per cent feeling the pinch.

Looking at the biggest winners and losers, it shows how much regional variation comes into play with two trades appearing in both sections.

Winners:

• Electricians in the North-East: Up 18%

• Equipment & Operator Hire in the South-West: Up 17%

• Steel & Timber Frame Erectors in the South-West: Up 17%

Losers:

 • M&E operatives in Midlands, North-East and South-West: Down 18%+

• Steel & Timber Frame Erectors in the Midlands and South-East: Down 17%+

• Equipment & Operator Hire in the North-East: Down 19%

Hudson Contract Managing Director David Jackson comments: “The Office for National Statistics is, as expected, reporting a decrease in construction output, so our own pay stats confirm the trend. I’m hoping the budget will bring more positive news – the Chancellor needs to produce something that will kick start construction again.

“The newly-announced Mortgage Indemnity Scheme seems to be a step in the right direction, as it will help builders and first-time buyers alike. Let’s hope there is more to follow.”

click here to see this month’s paystats

Would you send a firm ten grand up front in the hope that they’ll do a good job for you? No, neither would I.

And yet in the past month alone, I have heard about four construction firms that have elected to do just that.

The four businesses in question have entrusted their payrolls – averaging £10,000 a week – to firms that claim to be ‘Just like Hudson Contract’. Except they are not. Because unlike us, these payroll providers have:

• No legal standing

• No case law to protect their business model (not to mention their clients’ payroll)

• No proven trading history

Number One Read more »

Attention all scaffolding firms

A new, national trade association for the scaffolding industry has been launched. The Scaffolding Association is a not-for profit organisation that has been founded to improve the understanding, safety and standards of scaffolding across the construction industry.

The Association intends to ‘continuously improve competence and minimise risk across the scaffolding industry’ by focusing on four prime objectives:

1. Support the whole of the industry through a competence-based accreditation scheme, in line with the Construction (Design and Management) Regulations 2007

2. Work with procurement partners and other interested parties to ensure the correct information is available to enable the safe commissioning of scaffolding projects

3. Provide accessible, robust technical guidance for scaffolders, designers and procurement partners

4. Encourage high standards of training and competence across the industry

Scaffolding Association founder Robert Candy told Hudson Contract: “Membership of the Association is based on a process that assesses whether individual companies possess the required levels of compliance and are competent to undertake the jobs they are involved in, along with the appropriate quality systems to maintain best practice standards.

“Criteria such as employment practices, or turnover will not be taken into consideration. And all members of The Scaffolding Association will be treated equally.” Read more »

Want to be part of our £5,000 per month giveaway?

Hudson Contract’s Rewards Programme continues to go from strength to strength. Since 1st January 2012 we have written cheques totalling over £11,000. And we’re ready and waiting to give away even more!

Clients who have claimed their Hudson Rewards – individual sums range from £50 to nearly £3,000 – have been spending their windfalls on everything from pot plants and office furniture to a Georgian table for a period redevelopment.

While one Midlands-based contractor chose to give its reward to Help for Heroes

Remember if you are reading this, you are eligible for a Reward.

Instead of spending our marketing budget on advertising, we prefer to reward clients who help us spread the word about the advantages of using Hudson Contract:

1. Click here and fill in the details of the company you want to refer to Hudson Contract
2. It’s really helpful if you  tell whoever you recommend what you’ve done, so that we call them they know who we are!

How much will you earn?

If a firm you recommends starts transacting with an average of four operatives over the first ten weeks, we’ll pay you £200

Or if whoever you refer has 40 operatives on average over the first ten weeks, your name goes on a cheque worth £2,000

Don’t know a company with 40 operatives? How about five companies with eight operatives That would also work out to £2,000 and as you know, our service works equally well for single operatives right through to PLCs.

We know everyone is busy…

…but if you know of firms that say they’d like to become Hudson Contract clients but haven’t quite got round to it, why not give them another nudge?

With the new tax year approaching, it’s an excellent time for firms to switch to us. And it also means you could have your Reward in time for the summer holidays!

What makes Keith Marshall special? He’s Hudson Contract’s 100,000th freelance operative!

Hudson Contract has reached a momentous milestone: The 100,000th contract and declaration set was received into our offices at the end of January.

And here is our 100,000 operative:

Forty-six-year-old Keith Marshall, married with three daughters, learned his trade as a plasterer the hard way. He left school at fifteen, and went straight into the trade, working as a labourer for before he felt skilled enough to go it alone. While still a teenager, he was sufficiently confident in his ability to offer his skills as a fully qualified plasterer, and from that day has earned his living through hard graft and excellent customer service.

“Over the years, I’ve known both good and bad times,” he says.  “For instance, in the early 1990s, when the UKs building trade hit rock bottom, I joined the exodus to ply my trade in Germany, just like thousands of other subbies.  I think I must have been inspired by the TV series Auf Wiedersehen Pet!” Keith jokes.  “But I stayed for three years, so it wasn’t all bad, by any means.”

In very good times Keith has been able to earn more than a doctor.  Right now, though, when rates are half what they were in 2008, he is happy just to secure regular work to pay the bills.

 “I try to secure work with larger sub-contractors where possible to try and he maintain a regular income,” he explains.  “But whenever work starts to dry up, I phone around to see what else is available.  That’s the nature of the career I have chosen. I know nothing else.”

Keith is one of a number of freelancers currently being used by Cannock-based SDP Plastering on a prestigious project for Thomas Vale in West Bromwich.

SDP have been Hudson Contract clients for several years and their jobbing foreman Ivan Hicks – who is also contracted and paid through Hudson Contract – adds “We’re all really happy with Hudson Contract. We like getting our weekly text messages,  And on the rare occasions when we have a query your girls in the office are brilliant!” Read more »

Freelance Builder Pay Trends: February 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

It was business as usual in January.  Which is to say that – as usual for this time of year – there was less work than in previous months, resulting in labour-only subbies across all five Hudson Contract regions earning less.

Comments Hudson Contract Managing Director David Jackson:  “This is exactly as we were expecting based on pay stats for previous years.  Christmas and the New Year always impacts on projects and everything slows down for a couple of weeks.”

The Midlands was the worst-affected region in January, with earnings down by 8.44%.  Freelance builders in the North-West fared relatively better, with a fall of 1.76 per cent compared with twelve weeks ago,

Other general observations:

• Plasterers had a better month than other trades, with earnings up everywhere except in the South-West – and jumping by 8.52% in the South-East
• The South-East also leads the way with the highest regional weekly earnings during January, although the figure of £636.39 is 5.31% less than it was back in November
• Average earnings are currently lowest in the North-East at £572.30 – freelance builders everywhere else are taking home at least £600

David Jackson adds: “Looking ahead, by the end of January, the number of operatives being paid by Hudson Contract was back up to 93% of the peak seen before the festive break. So things have picked up during the month and hopefully this will filter through in February’s pay trends – although the spell of bad weather during the month might also have taken its toll.”

click here to see this month’s paystats

In trouble with HMRC? It may not be too late for Hudson Contract to help.

Moments after Harry Redknapp walked free from Southwark Crown Court, an HMRC spokesman insisted:  “…it always makes sense to come forward and talk to us before we come to talk to you.”

But what if HMRC has already knocked on your door and you discover you’re at the centre of a status investigation?  Or – even worse – your self-employment contract are deemed to have failed a compliance test, and the Revenue announces you’re facing a huge penalty.

Does that add up to a red card for your business?

With Hudson Contract on your team, it’s possible an HMRC penalty won’t relegate your firm into the history books.

“We have two specialist tax advisors who probably have more experience of dealing with CIS issues with HMRC than anyone else in the country,” says Hudson Contract Sales Director Richard Crisp.  “Failing an HMRC challenge isn’t necessarily the end of the world, as our trouble-shooting experts might still be able to help.”

At Hudson Contract it’s a familiar story:

1. A construction company asks its advisors to draw up a contract of self-employment

2. The contract is prepared in good faith

3. The contract fails to withstand an HMRC compliance inspection

4. The construction company – not the advisor – faces potentially ruinous fines and penalties

“I can point to two recent cases where contracts prepared by a third party ended with construction companies being fined £90,000 and £36,000 by HMRC,” says Richard Crisp.  “And then there is the story of the firm that received a letter from HMRC informing them they had failed a compliance investigation and were being fined £800,000.

“On the day they received HMRC’s decision, they were referred to me by a Hudson Contract client. We met immediately, one of our tax advisors got involved, and a potential recovery plan was drawn up.

“Although it wasn’t easy, the fine was dropped completely – from £800,000 to zero – after seven months of detailed counter arguments.”

We have also helped firms in similar circumstances – they now engage our services as a direct result of their contractual disasters.

“There are a growing number of firms jumping onto the bandwagon, offering all kinds of hit-and-miss self-employment solutions,” Richard Crisp continues.  “But there are very few, if indeed any, who are either willing or able to provide a potential post-compliance solution – and yet on more than one occasion we have proved that Hudson Contract can put right the ineptitudes of others.”   If you know of a firm with an HMRC headache, put them in touch with Hudson Contract right away

If you know of a firm with an HMRC headache, put them in touch with Hudson Contract right away

As you know, Hudson Contract clients have nothing to fear when HMRC comes calling.  But if you know of a business that’s in trouble with its self-employment contracts – or is an accident waiting to happen, which applies to so many contracts prepared in good faith by accountants, or downloaded from the internet (a very bad idea) – then please give them our details.

We can’t guarantee HMRC will reverse a decision.  But we give you our word will do our utmost to help achieve a result for the firm you recommend.

Hudson Contract Client Survey

Last month, we asked for your views on what was happening – and about to happen – in construction.  Here’s what you told us:

How’s your order book?  It’s a mixed yet predictable report. Firms that specialise in the private sector report full order books, whilst those that work mostly in the public sector say spending cuts are now making themselves felt, and orders have slowed or stopped altogether.

How far ahead have you got work?  Many clients are already scheduling work for the end of this year and even into 2013. But public sector-reliant firms that normally rely on work picking up this quarter – as councils spend their surplus before the end of the financial year – have been hit hard, and have gaps in their order books.

What are the current issues facing your business?  The key concerns are cashflow and prices being squeezed, and these are problems that are unlikely to go away soon. One client specifically identifies ‘extra over items’ as a particular bone of contention – the issue being that once the price has been agreed, any additional costs incurred, which may be entirely out of a sub-contractor’s control, are not being covered by the main contractors, putting a further squeeze on the project costs.

Are you spending more time chasing invoices? The answer is a resounding YES.  What’s more, firms at the bottom of the payment chain are being left waiting longer and longer for payment.  By a strange turn of fate, however, those doing work in the public sector say they are often getting paid within 30 days.

Will things get better or worse for your business during 2012? The message is:  “Ask me again at the end of year!” The knock-on effect of cutbacks means there is general uncertainty about where future work will come from.  Even those whose order books are currently full are erring on the side of caution, because delays happen and funding is still being pulled.

Comments Hudson Contract Managing Director David Jackson:  “No one was prepared to say with full confidence that this is going to be a good year.  The only point on which there’s general agreement is that Hudson Contract enables clients to maintain a flexible workforce and keep cost competitive, so that the moment the economy picks up, they are perfectly positioned to respond fast to the capacity needed.”

Free Breakfast Seminar – Peterborough – 1 March 2012

Hudson Contract’s successful seminar programme continues this year.  Our next event, held in conjunction with Greenstones Accountants, will help construction firms respond to three threats to their businesses:

• HMRC Status Inspections
• Employment Tribunal Claims
• The consequences of choosing the wrong labour provider

The event takes place at the Peterborough Marriott Hotel on Thursday 1 March.  Tea/coffee and bacon rolls will be served from 7.00 am and the one-hour seminar ends at 8.30am so participants can still do a full day’s work.

Don’t forget our Rewards scheme.

The seminar is free and is open to all construction companies, so if you know someone who might be interested, please pass on the details, and if the company you refer comes on board, you’ll be eligible for a Hudson Contract Reward.

You will get £50 multiplied by the average number of subbies they put through Hudson Contract in the first ten weeks – so ten subbies adds up to a £500 reward for you.

Please spread the word if you know anyone who is close enough for an early start in Peterborough. Just email fiona.pollin@hudsoncontract.co.uk with the details, so we can make sure there are enough bacon butties to go round!

You can also email Fiona if there’s anyone else you’d like to refer to Hudson Contract.

We’d also like to hear from accountants who might be interested in co-hosting a Breakfast Seminar.

Hudson Contract’s Employment Guarantee in action

In the last 18 months, Hudson Contract has successfully defended its ‘contract for self-employment’ on no fewer than ten occasions at Employment Tribunal, where we have never – ever – lost a case.

Regardless of our victories, however, the challenges just keep coming in.

The no-win-no-fee law firms view the tribunal process as a lucrative ‘cash cow’.

UCATT, meanwhile, continues to encourage self-employed operatives to make claims for holiday pay, and one of the five cases we are currently processing demonstrates why so many contractors are now opting to join the Hudson Contract family.

In one case, our client is currently engaging 45 labour-only subbies, all on Hudson contracts, working on various sites throughout the North-West.

As part of their recruitment drive a regional organiser from UCATT has been soliciting the lads for membership, and the union is now backing a claimant who had been self-employed for six months.

From our client’s perspective, the challenge won’t cost them a bean. Hudson Contract is fighting the case on their behalf, picking up all the legal bills and indemnifying them against all financial consequences should our contract fail an employment tribunal claim for holiday pay – or indeed a HMRC compliance investigation.

Over the past twelve years we have had 87 Employment Tribunal claims made against us. Number that have been upheld: ZERO

Even with our unprecedented successes in case law (including a High court judgement) Hudson Contract remains powerless to prevent such challenges.

Our experiences should act as a stark warning to any construction firm that believes their current contractual relationship somehow makes them immune from the challenges of UCATT or others.

The fact is there is not a contract on the planet that will stop an employment tribunal challenge being raised. If a contract of self-employment does not stand up to scrutiny (and many do not) then once a legal precedent has been set, the floodgates are open and every self-employed freelancer engaged by that firm could make a claim – with far-reaching financial consequences.

The Hudson Contract Employment Guarantee protects you from Employment Tribunal penalties. Why take the risk?

A tree for every client

Hudson Contract has1,750 clients, who send us around 80 contracts each working day.  I recently crunched the numbers and was taken aback to think how much paperwork we generate between us:  20,000 contracts and 20,000 declarations received in a year adds up to an awful lot of trees or paper.

So by the time you read this, we will have planted 1,750 trees – one for every client – by way of a balancing effect.

Planting began just before Christmas in parkland close to where our business started, in Bessingby village, East Yorkshire, and species include English Oak, Ash, Beech, Maple, Cherry and Scots Pine.

The parkland used to be owned as part of the Bessingby estate, by the Hudson family, whose name we ‘borrowed’ for our business.  It seemed especially appropriate to put something back into the local landscape.

After all, from little acorns, mighty oaks grow….

Three pertinent facts

1. A single tree produces about 11,000 sheets of A4 paper
2. All Hudson Contract literature is printed on recycled paper or comes from a sustainable source and is accredited under the Forest Stewardship Council
3. All confidential wastepaper from Hudson Contract is destroyed and utilised by a local farm for fuel and bedding