Tax rule changes to crackdown on false self-employment are adding to a scarcity of bricklayers in the industry, Construction News has been told.
The tax rule changes were introduced by HMRC in April to crackdown on illegitimate self-employment in construction and other industries through payroll companies.
Agencies and umbrella companies that supply labourers are now required to act as employers and deduct income tax and national insurance contributions for non-directly employed workers, unless it can be proven that they are genuinely self-employed.
Recruitment specialist Hays’ construction director Duncan Bullimore said the changes were causing “downward pressure on labourers’ take-home pay” because employers are having to make a 13.8 per cent NIC, but cannot afford to increase bricklayers’ rates on fixed price jobs.
“Downward pressure on pay is forcing workers to seek self-employment in other ways, such as the repair and maintenance and domestic market, where they can still work as self-employed [reducing the supply of bricklayers]. Or, it is forcing workers to demand more money for shifts,” he said.
He said Hays has seen a 30 to 40 per cent increase in demand for bricklayers in 2014 compared to 2013, and that temporary workers were asking for at least 20 per cent more in pay now than they were three to six months ago.
Demand for bricklayers has risen dramatically in the construction industry, as recovery is driven by a rise in house building starts. In its 2014 Construction Skills Network report, the CITB found that 1,740 bricklayers are needed to join the industry each year from 2014 to 2018 to meet the demands of a recovering industry.
Careers in Construction reported an increase in bricklaying vacancies of 126 per cent in the first six months of 2014, compared with the same period in 2013. The rate of applications dropped to fewer than 0.4 per vacancy in H1 2014, from 3.6 applications per job in H1 2013.
One top-20 contractor source told Construction News it had been forced to design brickwork out of a scheme, and reapply for planning permission, because they were unable to source bricklayers to deliver the job.
Other contractors said that delivery times of up to 50 weeks for bricks were affecting projects.
Willmott Dixon’s London managing director Chris Tredget said: “I’ve got a free school at the moment where we’re having to change from one brick to another because we couldn’t get the first type for 40 weeks.
“To get that, it’s 38 per cent more in terms of cost, and that’s falling at my door and we are having to go back and reapply for planning with the one we are putting forward.”
Construction Products Association economics director Noble Francis said that brick manufacturers had increased production to meet rising demand and that EU imports had increased to offset short-term drops in brick supply.
But, he said, “the skills side is less flexible and you cannot just easily import labour to deal with a rapid recovery”.
The Federation of Master Builders’ head of external affairs Sarah McMonagle said half of its members have reported bricks being in short supply, and have had to rely on imported bricks or use different materials for jobs.
An HMRC spokesman said: “HMRC has no evidence that the changes to legislation have affected the supply of labour, in the construction sector or more widely.
“There is emerging evidence that agency workers previously classed as self-employed are now paying employed levels of tax and National Insurance. This indicates that the legislation is working as intended.”