Industry calls for prime minister to suspend VAT and PAYE payments

A consortium of construction and housebuilding trade bodies have written to the prime minister requesting a blanket deferral of tax payments in order to enable businesses to weather the coronavirus pandemic.

Andy Mitchell, co-chair of the government-industry Construction Leadership Council, wrote to Boris Johnson and chancellor Rishi Sunak alongside major industry bodies. The letter requested the government ensure public sector clients continue paying construction businesses promptly, and consider instituting payment holidays from taxes such as VAT and PAYE to help businesses’ cash flows.

News of the letter emerged in advance of an expected announcement by Rishi Sunak of further measures to help businesses and employees hit by the fallout from the virus pandemic.

Yesterday, Johnson announced “social distancing” measures expected to have a major impact upon the economy, with commentators speculating the government may need to find hundreds of billions of pounds to keep the economy moving.

The letter was co-signed by Suzannah Nichol, chief executive of construction body Build UK, Alasdair Reisner, chief executive of the Civil Engineering Contractors Association and Brian Berry, chief executive of the Federation of Master Builders, which includes many small housebuilders among its members.

Berry told Housing Today that the letter, which was sent to the prime minister earlier today, also requested that government allows construction firms to keep sites open for as long as safely possible to ensure the industry does not grind to a halt.

He said it asks the government to “instruct all public sector clients” to keep paying construction firms and to “consider financial measures such as deferring payment of VAT and PAYE to reduce the burden on businesses and keep the cash moving in the sector as much as possible”.

Berry said: “It’s great to see industry bodies joining up in a national crisis to speak with one voice when it is needed most.”

The news came as another trade body, the National Federation of Builders (NFB), called for ministers to support the sector with a pragmatic stance and financial support.

Richard Beresford, chief executive of the NFB, said: “The situation is extremely serious. Government and the construction sector needs to also recognise the risk of mass absence from construction sites and the potential impact of delayed payment resulting in the need to lay staff off or make redundancies.

“A pragmatic and dynamic risk-based approach, supported by government, is needed.”

Yesterday, the French president Emmanuel Macron announced a package of measures worth€300bn to help France’s economy, which he said were designed to ensure no businesses would go under because of coronavirus.