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Webinar: The post-lockdown environment and options for businesses in distress

In conjunction with Quantuma and the Doyle Club, we held a live webinar and panel discussion to explore what the construction and property development market might look like post-lockdown. In this webinar, the panel also discuss what the options look like for businesses that may be experiencing distress.

Speakers on the panel include;

Terry Chapman, Chief Executive at PDSI Construction Consultants who talks through project recovery as well as technical and potential COVID-19 disputes; and Andrew Watling and Graham Randall, restructuring and insolvency partners from business advisory firm, Quantuma.

The panel look to provide practical insight and views on what businesses can do to manage the challenges posed as we move through what is likely to be a very tough recovery period as the UK economy moves slowly out of lockdown.

Specifically the team will cover:

  • Emerging from the lockdown
  • Project recovery identification and approach
  • Disputes – technical experts, COVID-19 and time analysis & cost analysis
  • Creditor rights in insolvency including insolvency law update (moratorium, petitions and statutory demands)
  • Options for distressed businesses including insolvency processes and advisory
  • A case study in construction where contracts were saved

Initiate audited for ISO 9001:2015 with no non-conformities reported

ISO 9001:2015

Initiate Consulting Ltd, part of the PDSI group, are please to confirm the result of a recent audit by BSI. We passed the audit with no non-conformities raised and have been re-certified against ISO 9001:2015 for further 4 years (subject to annual reviews).

The Initiate 9001 process and audit is lead by Claudia Mallon and is published on our Intranet.

Ian Lumsden, managing director of Initiate, said “ISO 9001 is a key element of our business processes and very important to our Clients. So we are pleased that we passed another audit with no non-conformities. Well done to Claudia for managing 9001 and the audit and all staff for compliance over the last 12 months”

Profile welcomes a new member of staff

Profile Construction Consultants Ltd, a specialist planning consultancy and part of the PDSI Group, recently welcomed Charlotte Begby to the team at West Malling.

C BegbeyCharlotte is an experienced claims consultant, contract administrator and chartered quantity surveyor with international experience gained from working in Australia, the Middle East and Caribbean as well as the UK.

Charlotte’s practical experience is supplemented with a sound understanding of contract and construction law gained through her Bachelor of Law degree and Master’s degree in construction cost management.

Charlotte’s key areas of expertise include infrastructure (roads, bridge and tunnel), oil and Gas, Mining (iron ore), hotels, sports and leisure, residential and mixed use projects.

Charlotte is currently working as Senior Claims Consultant with a focus on forensic delay analysis for a number of Clients.

If you would like more information on how we can help with your disputes or claims please contact us here.

Engenie EV Charging Point rollout supported by Queensborough Project Management.

Queensborough Project Management have been supporting Engenie for the last 9 months as they roll out a nation wide network of EV charging points in car parks of supermarkets, pubs, stations and anywhere that an Electric Vehicle drivers need a power top up.

Queensborough have been responsible for programme management once the sites have been contracted and we have completed over 50 with the roll out due to accelerate.

Queensborough are full spectrum project managers, cost consultants and programme managers for private clients across all sectors. More here

Georgina Shultz makes the move to Trainee Planner

Having graduated from university with a degree in Spatial Design, Georgina has become Profile’s latest Trainee Planner. Profile always have 1 or 2 trainees and she joins an elite band of planners who have trained at Profile over the last 25 years.

Georgina has experience in creating programmes on PowerProject, creating links and coding, as well as carrying out progress updates to the programme.

Georgina has also provided 2D and 3D site logistics drawings to detail traffic plans, scaffolding layouts and construction phase plans for various projects, using Sketchup and Photoshop. She also has experience in using AutoCAD for carrying out 2D drawings.

Georgina is furthering her knowledge by assisting with all possible projects, from tender programmes, to claims and logistics drawings. She plans to use her Sketchup skills combined with Powerproject knowledge to begin providing basic level BIM models, working up to high quality BIM models.

 

RESI 2019 – PDSI Report

Terry Chapman, PDSI Group CEO,along with 750 leaders of our industry attended the 2019 RESI Convention in Cardiff in early September. https://www.resiconf.com/

Terry Chapman said “I found the RESI 2019 conference very interesting and I was impressed with the number of clients and designers who attended and actively engaged in discussions to develop our industry.”

The first session was with Esther McVey, Minister of State for Housing and Planning, who spoke about how the government is to invest billions of pounds into housing up to 2028, with a target of 300,000 new homes every year. She said last year, over one million new homes were built, with 360,000 being affordable. In the process, stamp duty was cut, and help to buy schemes were implemented with the government continuing to help and guide people into home ownership without increasing costs and profits within the industry. Moving forward, the government is looking to expand on shared ownership, rent to buy, right to buy and right to build initiatives, in order to help people own their homes. Only in London has the rate of new homes fallen, with increases being seen elsewhere, such as in Manchester, with an increase of 12%.

She also talked about how new homes post Brexit will strive to be global leadership in housing, using technology hubs, engineering and architecture to lead the way, “supported by the government to support our British public”.

On the day of the conference, the government announced that they would be introducing financial support to local authorities in order to crack down on illegal buildings, as well as investing in zero carbon homes and single occupancy homes (maybe with shared facilities), but at a lower cost than today’s market by using modularisation and technologies.

Following this, there was a presentation from Hannah Blythn, the Deputy Minister for housing in Wales, who stated that the Climate emergency is the biggest factor we need to solve today. Housing must respond, and the longer we leave it, the worse it will become and the more costly it will be to resolve. Technologies and behaviour are key factors in resolving the challenges we all face, on behalf of the younger and future generations who’s fault this is not!

Kevin McCloud, Broadcaster and Author, claimed that many buildings just need remodelling instead of knocking down. He feels that we need to respect our buildings by upgrading and reusing them, as successful models have shown. To him, space is not just size, it’s about connection and emotional experience. So a room does not have to be big to provide a sense of space and that sequencing of a space can be done at any size. He used the examples of self builds in Bicester which show value and innovation, which could ultimately be the idea of future affordable homes. These ideas don’t just apply to self-builders either, as the construction industry has one of the highest percentages of SMEs, and these ideas provide the opportunity to become more resilient in the delivery of housing in the UK. Kevin also talked about the issues of quality to ensure that we continue to deliver high quality homes, and how a consortium of SMEs could be the way forward. His final discussion point was that it is widely recognised that the quality of social housing is often of a better standard and quality than that of open market housing, and that this needs to be resolved in order to deliver quality and sustainable housing.

A session was presented by Homes England, who talked about their new mandate to get more homes built in the next five-years. They went on to discuss how the technology approach in Japan in the new build housing sector is advanced in comparison to the UK market and is seen as an opportunity to learn and realise the benefit of R&D, tech and sustainability in the industry.

With the support of Homes England, more, a platform has been created to enable the rise of modularisation. The UK is currently delivering the largest modular building programme in Europe, which, when started, was the largest in the world! With suppliers looking keenly to build factories in the UK, it’s only a matter of time until modulisation is a part of every development, with all indicators suggesting that volume modular construction is here to stay.

Homes England stated that whilst the market may appear to be stabilising, there are plenty of funding and investment opportunities in London, providing developers remain flexible and reactive to market situations and requirements. While international investment is helping to stabilise the market as opposed to seeing it drop, recent months have seen a lot of domestic investments supported by NHBC, leading to an increase of 23% take up in London.

PDSI works actively in BIM and modular construction and supports clients, designers and contractors through project management, construction planning and cost management.

Images copyright RESI Convention 

VAT Reverse Charge – update no 1

Monday 16th September 2019  Brad Bamfield joined an HMRC webinar on VAT Reverse Charge which was very informative but only really skimmed the surface.

Picture of Brad BamfieldIt does seem however that it only applies to Contractors and Subcontractors who are also paid through CIS and not “End Users” or material only suppliers.

Brad is looking farther into this, but it also seems professional advisers are excluded and should charge VAT in the usual way.

However, Brad says “I asked specifically about Cost Managers and PMs but did not get a clear answer, so more work needed”.

We are attending another seminar early in October so will add an update after that.

PDSI and subsidiaries awarded Cyber Essentials for 2nd year

PDSI and its subsidiary companies – Initiate Consulting, Profile Construction Consultants and Queensborough Project Management have been awarded Cyber Essentials certification for year ending July 2020.

Terry Chapman Group CEO says “Cyber Essentials is just that essential in this day and age and it forms a key part of our defense of the data we hold.”

PDSI Group adopted Cyber Essentials as “best practice” in 2018 when we found our old infrastructure was potentially unsafe. The review process of Cyber Essentials allowed us to challenge every part of our IT and Online infrastructure and to provide our management board with confidence we are complying with GDPR requirements.

It is no coincidence that the Information Commissioners Office with the introduction of GDPR made it abundantly clear that if businesses did not review and address short comings then they could be fined large sums and the principals possibly jailed.

Brad Bamfield said “we involved everyone in the business and our 4 out sourced IT and VoIP telecoms companies in our review and found that new vulnerabilities arise all the time. It is easy to become complacent and assume you are all OK until you find your web site has been breached. Simple steps outlined in Cyber Essential reviews can show you where you need to improve.”

Our certificate number is 9382370780624912 and is dated 12 July 2019

More on Cyber Essentials here

More on our Privacy Policy here

VAT Reverse Charge – does it affect us?

It was announced on Friday 6 September 2019 that the implementation of the domestic reverse charge, which makes payment of the tax responsibility of the customer rather than the supplier, will now come into effect on 1 October 2020.

A statement from HMRC said that the change would be delayed because industry representatives had raised concerns that the sector was not ready for it.

A group of construction industry bodies wrote to the government warning of the problems it would cause companies last month, asking for a delay until April.

The change is part of anti-fraud rules aimed at targeting VAT-related fraud in supply chains within construction.

The statement from HMRC added that the body “remains committed to the introduction of the reverse charge and has already increased compliance resource”.

A UK customer who acquires supplies for construction services must account for VAT due on these materials on their VAT return rather than the supplier. In other words, the domestic reverse charge prevents fraudsters from stealing VAT owed to HMRC.

HMRC also underscores the need for businesses to adapt their accounting systems for dealing with VAT. Many of these will experience a negative impact on cash flow whilst no longer receiving VAT payments from customers for services where charges apply.

Brad Bamfield, our Finance and Management Director, is leading the PDSI Group Reverse VAT initiative and is attending various courses to ensure we are ready.

Brad said “I have read the HMRC guidance and its wording is not the clearest in the world. The definition of an End User is new and is key to the application of VAT through the supply chain.

My understanding is that domestic reverse charge will only affect supplies at the standard or reduced rates where payments are required to be reported through the CIS and that specified services are excluded, including professional services of architects, surveyors and certain consultants.”

Brad will provide more information here as he works through what is required and what we and our supply chain need to know and do.

However, we already know when the new rules do take effect, only principal contractors at the top of the supply chain will receive VAT payments, which they will collect from the client before paying it to HMRC.

More importantly monthly cashflow profiles for subcontractors will change, and all contractors will have to take on more administration, understanding who should and shouldn’t be charged VAT.

Brad Bamfield

The role of a Development Manager

To demonstrate the role of a Development Manger we must first think about what a “developer” is and what they do.

Real estate or property development, is a multifaceted business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others from speculative developments that will be sold at the end of construction to extensions to premises for business wishing to expand.

Development Developers are the people and companies who coordinate all of these activities, converting ideas from paper to real property. Real estate development is different from construction, although many developers also manage the construction process.

Developers buy land, finance property deals, build or have builders build projects, create, imagine, control and orchestrate the process of development from the beginning to end including obtaining the necessary planning approval and financing, build the structures, and rent out, manage, and ultimately sell it.

Developers work with many different counterparts along each step of this process, including architects, town planners, engineers, surveyors, building inspectors, banks, contractors, leasing agents and more.

For many clients, stepping outside their core business into the world of property development and management can be challenging, but this where an experienced Development Manger comes in, they offer a full development management service,

  • assisting clients with the initial startup processes and
  • analysis of the financial viability of a scheme
  • formulating robust and appropriate development strategies and
  • manage the development process from the appointment of a professional team through to t
  • he planning and successful delivery of projects,

Ensuring you start right will mean you will end right as well. Most projects fail not in construction (although it looks that way) but in the selection of the consultants, contractor and design

PDSI are increasingly called upon to apply our skills and experience earlier in the project cycle, working with developers or property owners who have the skills to create the opportunity but need support to make it happen.

Organising for a development

A development team can be put together in one of several ways.

  • At one extreme, a large company might include many services, from architecture to engineering.
  • At the other end of the spectrum, a development company might consist of one principal and a few staff who hire or contract with other companies and professionals for each service as needed.

Assembling a team of professionals to address the environmental, economic, physical and political issues inherent in a complex development project is critical.

A developer’s success depends on the ability to coordinate the completion of a series of interrelated activities efficiently and at the appropriate time.

The development process requires skills of many professionals:

  • architects,
  • landscape architects,
  • civil engineers and
  • site planners to address project design;
  • market consultants to determine demand and profitability
  • Quantity Surveyors to define project’s economics;
  • lawyers to handle agreements and government approvals;
  • environmental consultants and soils engineers to analyse a site’s physical limitations and environmental impacts;
  • surveyors and title companies to provide legal descriptions of a property; and
  • lenders to provide financing.
  • The general contractor of the project hires subcontractors to put the architectural plans into action.
  • Sales agent for marketing and sales or
  • Logistics of moving into your new building

And the person who manages all this is the Development Manger as you can see its the key role.

It may well be that as a business you have an experienced person or people to manage all these facets of the development but if you are not a regular developer you need the support of a consultant.

Now beware many consultants tell you they are Development Mangers but in reality they are Project Managers and there are subtle differences.

Project Managers are totally focused on delivery, “give me the land, the drawings and I will give you the building”

Development Mangers make decisions about viability, design, cost and quality – they produce the stuff the Project Manager needs to deliver the project.

They are really different people with totally different skills.

Development Managers are creative and problem solvers, whereas Project Managers are process based deliverers

So a good Development Manger usually makes a poor Project Manager and vice a versa as they have different mind sets.

PDSI offers Development Management to our clients and provide support and management from Day 1 when you just have an idea to when we hand you the keys to you completed project.

Call Terry Chapman now for more information about how we can help your deliver a successful project.

PDSI Joins Export Champion Community

PDSI group companies have wide experience of working overseas and exporting our property and construction services. Profile Construction Consultants has contracts in 3 European countries and an office in Spain and Queensborough Project Management has experience of working in northern Europe and the Middle East.

We are pleased to be an Export Champion and Advocate helping other businesses to begin exporting their services.

Terry Chapman, Group CEO, said “we are very proud to be part of the Export Community and look forward to working with other business to the benefit of all.”

The Department for International Trade’s (DIT) Exporting is GREAT campaign aims to spark a movement around the UK of companies selling their products and services overseas.

At the heart of the campaign is the Export Champion Community,  consisting of over 1,000 ‘Export Advocates’ and ‘Export Champions’; everyday businesses of all shapes and sizes, run by extraordinary people, (theses are DIT words not ours) from around the UK that are proudly selling overseas.

  • become part of Exporting is GREAT, the Government’s most ambitious and high-profile export-focused campaign ever
  • join a UK-wide community of exporters who share advice, ask/answer questions and signpost to where support is available
  • get access to a suite of digital campaign assets to use in your communication and marketing activity

Any UK-registered company that has exported at least once you can join the network of Export Advocates, which comprises firms from across England, Northern Ireland, Scotland and Wales in a wide range of sectors.

More here https://www.great.gov.uk/community/

What is IR35 and does it apply to me?

What is IR35 and does it apply to me?

IR35 was introduced in 2000 and designed to reduce tax avoidance by contractors who HMRC believe to be “disguised employees”- in other words people who are working in similar ways to full-time employees but invoice their services via limited company in order to pay less tax.

IR35 Rules:
Under IR35 rules the contractors would have to show that they were not employed by the company and have no employment relationship with the company. Contractors can find out whether they fall ‘inside’ or ‘outside’ IR35 they would have to keep in mind the following four factors:

1. Control
Self-employed contractors have their own control of when and how they work, if the contractors contract seems to be rigid and sets the working patterns and also applies excessive control over the contractors work and how it is completed these terms would a make the contract look like an employment contract and not a contractors contract. This makes it very likely that you would fall within IR35 or can make it hard to prove otherwise.
2. Contract
It is in the best interest of the contractor to create their own contract to the hiring organisation to prevent any misunderstanding within the contract. This allows the contractor to set their own terms and not have the term set for them by the hiring organisation.

3. Mutuality of Obligation
As a self-employed contractor you would have to show that you work on a project to project basis where there would be an contract end date in the contract and would have no obligation to work past the contract end date stated the contract with the client.

4. Substitution
As a contractor you can supply a substitution to the organisation, but where in the contract it states there is no right to substitute this could potentially make the contract fall within IR35.

IR35 in the public Sector

Initially IR35 employment status was always declared by the contractor and not the hiring organisation, but in 2017 these rules changed dramatically for the public sector and for the contractors but also for the hiring companies. The liability to prove the self-employment moved from the contractors to the hiring organisation which then made it problematic for either parties because if the contractor was to had been found to be inside IR35 they would have to pay tax and NI as employees and not receive employee benefits of the organisation. These changes also then impacted the hiring organisation as it was now seen as a risk because they could be fined if they had incorrectly identified the contractor as outside IR35, this lead to many of the public sectors to cease using self-employed contractors.

IR35 in the private sector

Currently the private sector does not have to worry about IR35. But now the Government have argued that contractors paying less tax than employees should be considered as unfair and as a result of that the Government are in consultation about further changes to the IR35 and some of those consultations have resulted in IR35 being reformed and extended to the private sector and their contractors in early 2020.

IR35 Check list: (Test your employment status)

Payments
In order for you to stay outside the IR35 you would have to be paid on a project-to-project basis and would have an end date to their project and usually the work ends when that period of time has reached.

Financial Risk
Self-employed contractors are much more likely to experience a higher level of financial risk compared to employees of an organisation. If you have guaranteed weekly or monthly pay in your specific contract within the organisation, this will look like an employee’s contract rather than a contractor fees being paid for the service they are providing. Also if you are required to send invoices when billing the organisation it must detail the services they are being billed for the period of time that you are requesting payment for. If it is guaranteed, fixed regular payments that look like a salary that could make the contract fail IR35 tests.

Equipment
As a contractor you would have to state within your contract that the equipment that would be used within the project that the client has assigned to you would be your equipment – if the contract does not state what the equipment is and who would be providing it HMRC could view this as if the client is providing you within equipment and would then put you within the IR35 as it would complicate figuring the status of the contractors employment status.

Exclusivity
As a self-employed contractor, a perk of this would be that as a contractor you are able to work with more than one client at once, however with this being said if a contractor seems to be working with one client for a prolonged duration it could be seen by HMRC that this is actually an employee to employee relationship and not client to contractor relationship.
Running Business
In order to prove your status, you would actually need to have a running business – this would include having a running website, office space or registered address for the business would all reinforce that you are operating as a self-employed contractor for your own business and not an individual who is offering their service as an employee.

How to prepare?

Firstly, you can check your status on the HMRC website using the link below: https://www.tax.service.gov.uk/check-employment-status-for-tax/reason-for-using-tool

Seek professional advice
After checking your status on HMRC and you are still unsure or would still like some help, seek advice before you go ahead and make any changes to your business as it stands – this will allow you to understand that changes and make sure that all the changes you make within your business are compliant with IR35 law. Seek advice from a professional who specialises in IR35 Laws and preferably within the contracting sector also.
Initiate use several specialist advisors and companies and we are happy to share them with our contractors. If you are interested in doing so, please contact the office.