CONTRACTS COMMITTEE GUIDANCE UPDATE The Contracts Committee has enjoyed a productive Spring and Summer, with a number of updated guidance notes completed. Revised versions of CG16:21 Employment Contracts and CG23:21 Training Costs Agreements were issued in July. In CG16:21, both the introduction and the basic example Statement of Particulars of Main terms of Employment have been updated to highlight changes arising from legislation effective April 2020. Employers now have to provide additional information to employees on their terms and conditions of service. CG23:21 has an added reference reminding members that since April 2020 employers are required to notify additional information on certain terms of service to employees. One such item is information regarding the training provided by the employer which would include training cost agreements. This guidance note should be read in conjunction with the updated CG16:21 Employment Contracts.
CG21:21 An Employer’s Guide to Right to Work Checks was issued last month (August). This new guidance gives members help and assistance when taking on new operatives and reflects the latest rules and regulations following Brexit changes which came into force on July 1 2021. Committee member Ian Fyall said: “The development of CG21 was quite challenging, with sections regularly replaced and amended to bring it in line with ever-changing Government guidance. We hope this guidance will help businesses when it comes to employing staff from overseas. “While this seems daunting, it’s actually fairly straightforward once you’ve mastered the process.” Next revised NASC contractual guidance note is CG18:21 Daywork, which is currently in progress. This should be issued in September.
CG17:21 Commercial Checklist for Scaffolding Contractors has replaced CG17:09 Commercial Pitfalls for the Scaffolding Contractor. Matthew Cousins, Contracts Committee Chair, said: “CG17:21 provides a comprehensive list of areas for businesses to focus on through every stage of contract scaffolding, from tender to final account. This gives contractors a quick and easy audit process to follow, helping to improve project management on jobs both large and small. “By including not only legal and commercial questions, but also some emotive ones, we hope to capture not only the usual processes, but also a way of recording the gut feelings and instincts which all scaffold contractors rely on every day.”
R&D CLAIMS WARNING BY LIZ BRIDGE, JOINT TAXATION COMMITTEE A firm has had severe financial difficulties because an R&D claim that was repaid to it last year has been investigated and found to be unacceptable to HMRC. The firm was originally approached by a business claiming to be tax experts in the field of R&D claims. A claim was drawn up and submitted by them and a large repayment was generated of which 25% was paid to the tax specialists as a fee. When a year later HMRC enquired further, they asked for a full repayment of the claim, plus interest and penalties. Your ordinary accountants can generally tell whether you do the sort of work which will qualify for an R&D claim. Do not believe the promises of ‘tax experts’ who will say things like ‘this has been approved by HMRC’, or ‘we have the opinion of a QC in chambers that this works’.
They do not accept or agree them in any shape or form. They simply tax you based on the presumption what you have said is true. If, when they enquire further, what they find shows that they have been misinformed, the whole system of tax underdeclared, interest and penalties come into play. If you put in a claim for R&D allowances, make sure you read it yourself and understand it, and you are confident that it is true and is not, to put it politely, a work of fiction. HMRC know very well the names of the firms that they have seen making false claims. They also know that very few active construction businesses do research and development within the meaning of the legislation. So please be careful.
None of these claims are worth a penny in the face of a challenge by HMRC. In this country our tax system is one of ‘self-assessment’. This means that you give your figures of profit and loss to HMRC and any claims for extra allowances, and they put out a bill based on your figures.
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