Construction firms take out £24.4bn in furlough and CBILS
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Carpenters, bricklayers and other trades have claimed £7.8Bn in grants to cover the income they have lost, this makes this group of construction workers the largest self employed users of the scheme, they outnumber the next sector three to one with most using the Coronavirus Business Interruption Loan Scheme (CBILS).
The Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan scheme has seen the construction industry have the largest amount of claims and loans which showed that £9.6bn and furlough grants worth £4.16bn have been claimed since April 2020.
This brings the combined total support to the construction industry as a whole to £24.4bn this in turn has slowed the number of insolvencies by almost a third which means that grants and other schemes have kept means firms alive during the pandemic that may have folded otherwise, with 2,042 firms collapsing according to the Insolvency Service, this is compared to the 3,228 that failed in 2019
Many firms are being urged to act soon if they are in difficulty and think about order books for the future and whether their businesses are actually viable into what will be a difficult time in 2021.
The low insolvency figures suggest there will be a backlog of firms going under after the support ends and firms will be tempted to take on work just to break even with materials prices rises as reported by nationaltradesmen.co.uk, and rising costs due to Covid compliance and supply chain issues will mean that jobs will take longer thus impacting on the profitability of these contracts.
There is also another elephant in the room with the reverse VAT charge meaning that clients will need to pay the VAT chargeable directly to the HMRC which means the cashflow of construction companies, will also be pinched even harder with new orders dropping almost 9% in the last quarter compared to the previous year in 2020.