CONSTRUCTION SMEs have been advised to tackle the dual challenge of rising prices and skills shortages with ‘collaboration, diversification, innovation and incentivisation’.
That’s the call from chartered accountants Wylie & Bisset following recent research from the Federation of Master Builders, which revealed that a lack of materials and industry skills shortages were holding back smaller builders.
Catherine McManus, tax partner at Wylie & Bisset, said, “We are starting to see a greater degree of collaboration between SMEs in the construction sector who, in a bid to secure the best possible prices on the resources that are available, are working together, and potentially sharing resources.
“We also have clients in the sector who are seeking to diversify beyond the core markets they currently serve and, indeed, develop innovative products/services to assist their recovery from the pandemic.”
Ms McManus said R&D tax relief can be claimed for those who operate via limited companies, and advises construction companies to review their processes to determine if they qualify.
“Rising costs and longer lead in times may lead to a rise in the number of loss making companies/businesses in the construction sector,” she added. “Such firms should note that there’s an extended short-term loss relief available for accounting periods between 1 April 2020 and 31 March 2022 for limited companies and for tax years 2020/21 and 2021/22 for unincorporated businesses, allowing a carry back of losses of up to three years instead of the traditional one year in many cases.”
On skills shortages, Ms McManus advises SMEs to consider tax-efficient ways to incentivise staff, such as a tax advantaged shares scheme.
“Rather than a one-off bonus or a salary hike, we are increasingly finding that clients are seeking to address staff retention and recruitment by considering longer-term incentives,” she explained.