Blanket Bans, IR35 & Hiring Contractors: What Construction Businesses Need to Know

Most discussions around IR35 focus on tax. But the real impact is being felt in the way construction businesses hire, retain and work with contractors.

Matt Williams from Clear North joins us on the UK Construction Podcast to unpack why so many firms are still getting IR35 wrong, how recent changes have shifted the conversation again, and why blanket bans may no longer be the safest option they once seemed.

Along the way, they discuss the ongoing shortage of quantity surveyors, why some sectors are thriving while others continue to wait on planning approvals, and how businesses can build more resilient commercial teams without limiting their hiring options.

Whether you're responsible for recruitment, commercial management or you're working as a contractor yourself, this conversation offers a practical look at what the latest changes could mean for you.

Topics covered:

• Why IR35 is still widely misunderstood
• The latest changes affecting contractors and employers
• Why blanket bans became common—and whether they still make sense
• The growing demand for quantity surveyors
• How infrastructure, utilities and data centres are shaping the market
• Practical advice for businesses engaging freelance professionals

🌐 Learn more about Clear North: https://www.clearnorth.co.uk/

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Thank you to our sponsor for this episode, WebMotion Media:

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Special shoutout to our dynamic host Jimmy Webb of Construction Cogs: https://constructioncogs.com

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Transcript

From groundbreaking projects to game-changing innovations, the UK Construction podcast brings you face-to-face with the industry's brightest minds and boldest thinkers. Each episode features candid conversations with construction leaders, architects, engineers and on-site experts who share their hard-won insights and behind-the-scenes perspectives. 

We cut through the noise to deliver actionable intelligence on market trends, emerging technologies and the forces shaping British building. Hello everyone. We're covering an area that I work in today, lifting operations. 

JIMMY: Hey Matt, thanks for joining us today.

MATT: How are you doing, Jimmy?

JIMMY: All right? I’m all good, brother, all good. Yeah, just enjoying
all your backdrop there as we’ve been discussing.

It’s looking cool.

MATT: Yeah, an eclectic mix. To be honest, I can’t believe how much
stuff we can fit in this room. And that sauna there is just the most
recent addition.

JIMMY: You’re getting in that after, are you?

MATT: Yeah, I was actually in it this morning before I got myself in the
zone.

JIMMY: Nice. Love it. Love it.

So tell us who you are, Matt, and what you do.

MATT: My name is Matt Williams.

I work for a business called Clear North.

We are a specialist agency that focuses on the commercial market, so
quantity surveyors, commercial managers, and estimators, but they all
fall within the same sort of remit.

We basically support clients that need QSs on either a freelance
standpoint, guys that go in for solutions-focused contract basis, six,
12 months, whatever it may be, and also on the permanent side of things
where they need a QS to specifically join their team.

And for reference for the audience as well, a QS is a quantity surveyor.

I’m guessing most of your audience being construction-focused will know
quantity surveyors, but just in case they don’t, quantity surveyors are
a mixture between a lawyer and an accountant on a construction project,
and they make sure that they can sort of protect the client that they’re
working for financially and draft the contracts to engage with their
clients and subcontractors and things like that.

And outside of that, we host a commercial leadership group called The
Click.

It’s a mixed sector, so cross-sector platform for commercial directors
and commercial managers to basically just be relaxed in and sort of
speak about issues that they’re facing with guys from all over the UK.

And that’s another one of our initiatives that we’ve got at the moment
where we also meet and do roundtable events to just try and solve
solutions from outside of the bubbles that people are normally in,
because you can get quite tunnel vision.

So they’re the two main focuses, but my personal focus at Clear North is
to provide clients with freelance quantity surveyors and procure
contracts for freelance quantity surveyors outside IIR35.

JIMMY: Okay, right, you mentioned IIR35, so we’ll touch on that.

Yeah, I’m glad you clarified what QSs are.

I’ve got to confess that QSs are the bane of my life as a tail crane
operator, because we have to get our timesheet signed.

Normally, project manager will sign them, but sometimes they get a QS to
sign them, and they’re all about margins and stuff, aren’t they?

So they’ll be quabbling over 15 minutes here, 15 minutes there, and it’s
like, come on, mate, just fucking sign it.

MATT: Exactly, so imagine what we’re like when we’re trying to do
business with these guys.

They’re our clients, and they’re the people that’s trying to protect
their clients with sort of the finance side of things.

So it’s always a fun process trying to negotiate terms with the guys
that negotiate terms.

JIMMY: Yeah, yeah, yeah. So what are you seeing in the market so far,
then?

MATT: We called it Survive 25 last year with regards to workload.

It was a real bit of a slump, and I think probably a natural slump off
the last couple of years, because it has been bouncing.

Rail had a real limelight, and moving into this year, from probably the
new financial year of 2026, utilities and infrastructure, engineering
and data centers, renewables, they’re all key sort of locked-in sectors
that have got a lot of work coming towards them.

Unfortunately, the commercial construction and high-rise res is still
becoming a bit of a struggle, which I’m guessing you’ll probably be
familiar with, with the building regulations that have been put in place
that have slowed down planning for the construction projects.

They’re more of a slow-burner sector at the moment, unfortunately, but
that will come good when eventually it all gets signed off.

It’ll be feast of famine within that sector, like it normally is.

There’s no work, no work, no work, then it’ll get signed off and it’ll
be too much to deal with.

Then we’ve obviously got AMP 8 coming up in the water sector, which is
the upgrade to the water network across the UK.

Fun stat for anyone really listening, it’s a QS apparently.

To deliver that successfully, every QS in the UK is needed just on that
alone.

That’s a bit around the shortage of what we’re facing, but in general,
the market’s feeling quite good.

We’re finally getting a bit of exposure to the data center market
because we almost give it all away to the Scandinavian countries because
we were too slow to get involved.

Our climate’s really good for it because it’s quite a cool climate.
Obviously, the data centers need… Well, it’s perfect because it’s always
freezing in the UK, basically.

Outside of that, it’s feeling good in comparison with last year.

JIMMY: Yes. You mentioned the planning-wise, which is part of the reason
why we took a big hit in construction last year. Things were really
slow.

Did you notice that? Yes. Have you noticed a difference this year so
far?

MATT: In the construction side of things, it’s the same conversation
with most guys. It’s just we’re still waiting on planning coming
through. We’re still waiting on planning.

There’s a lot of good tenders going in and some really exciting projects
coming through as well, which is nice to see.

It’s always the same conversation.

If I’m waiting to get in touch with a commercial director around, let’s
say they’ve got something happening in Newcastle or wherever, it’s
always just, yes, we’re still waiting for sign-off, which is shaking a
lot of guys out of that sector as well, unfortunately, because the
demand is so high everywhere else.

There’s carrots dangled for QSs specifically, but I would imagine
planners, PMs, electricians, a lot of guys are coming out of that sector
because of just how irritating it is to get the work through as well.

JIMMY: Yes. Something’s got to give, isn’t it, really? I think it’s
getting better.

MATT: Yes.

I think it will be, because I think regardless of what legislation or
rules are brought in in the UK, it’s always fast and hard rules that
shake up the market very quick, and then to realise how much of a
cascading effect it has on the industry that basically one of the
biggest industries in the UK is the construction industry.

It’s what we live and breathe.

Similar to IIR35, which we’ll touch on at some point, it’s all a good
idea to start with, and it needs done, but it’s not very thought
through, and it’s all of us that has to deal with the fallout of how to
manage it and realistically work with a really binding legislation.

I agree with you, something will give, but I’m hoping that backlog of
work doesn’t build up to the point where it then becomes undeliverable
again, like it seems to have a lot of stuff that gets implemented.

JIMMY: Yes, I think people will adapt as well with the planning process
and putting their requests in and that sort of stuff. They’ll adapt on
how to deal with it and what requirements are needed. Why are you here
today, Matt?

What do you want to talk about?

MATT: I would like to talk about IIR35, which makes me extremely popular
at house parties, if that’s my main go-to topic, which, to be honest
with you, it is at the moment.

I’d like to discuss the tax legislation that essentially distinguishes
the difference between a subcontractor and a permanent employee.

I can go into it a bit more if you like, but that’s the topic that I’d
like to discuss, mainly because there’s been a bit of a change recently
in the new financial year that I think a lot of people have missed.

JIMMY: Yeah, sure. So let’s clear up what is IIR35 then first.

MATT: Okay, so it’s not a new legislation.

It was brought in initially early 2000s for the public sector, and then
it was changed again in 2021, I believe, for the private sector, and
that was the real shake-up that a lot of people will have seen in the
market, because essentially up until that point, there was a load of
professionals working within big main contractor businesses and end
clients that were classifying themselves as subcontractors and therefore
benefiting from the tax efficiencies of using a limited company.

So guys were just earning more cash, which is fair enough if you’re
doing it correctly, but I believe the HMRC was identifying a lot of
people that were essentially just sort of working within a business for
20 years or however long it may have been, five years, jumping between
projects, no real sort of scope of what they were supposed to be
delivering, and it just become a bit of a, I’m just going to call myself
a subcontractor now because I want to pay less tax.

So in 2021, they changed the legislation to basically leave the tax
burden with the end clients that have brought in these guys.

So if you’ve brought in someone that, let’s say a planner or a QS, for
example, and you said that they basically just say that they’re a
subcontractor, the client has to basically find out whether or not, due
to the working relationships, whether or not they are, and basically all
that happened was they’ve basically added a load of risk to the end
client saying, if these guys aren’t paying the correct tax in your
business, you’re going to be liable for that tax.

And with, obviously, companies not wanting to be exposed to unknown
risk, pretty much most of the business is just blanket bans dealing with
contractors.

And over the last five years to now, there’s been just a lot of case law
involved that give people confidence to understand what it means.

But to generally summarize, the legislation is to identify if you’re
actually offering a service or you’re an employee.

And the way that you find that out is through an assessment that
basically is a yes or no questionnaire that asks a lot, basically
everything around the working relationship, whether or not there’s
financial risk involved for the person that’s coming in, or the business
that’s coming in, how they work within the business, whether or not they
control their own hours, whether or not they’re focused on a specific
project, without getting too granular on that, because that is a long
subject.

That’s essentially what it is. It’s a legislation to identify what sort
of tax someone should be paying.

JIMMY: Yeah. So in simple terms, it’s their way of saying, is this
person generally self-employed through their own company? Or are they
basically an employee in everything but name?

Yes, essentially.

MATT: Jimmy Webb or Jimmy Webb Limited. And there’s a distinction
between the two.

JIMMY: Yeah, sure. So are there any sort of, how are businesses and
contractors sometimes misunderstanding IR35 in?

MATT: Well, to start with, the key thing was that they weren’t really
addressing it. And that was pre-2021. It was just quite, it was up in
the air.

It was a bit fugazi fugazi. It was just sort of, yeah, we think you are,
so just come on in. Since now the misunderstanding has been a lot around
length of contracts.

A lot of the guys I speak to think that you can’t have someone in over a
certain amount of time.

But similar to like a groundswork subcontractor working on a package,
they could be there for three years if it’s a really big project.

So if there’s a specialist QS coming in to work on a project for two
years, as long as there’s the contracts in place, correct, and there’s a
clear scope for them to deliver on, that’s not too much of a problem.

Also a lot of contractor guys that I speak to, they think this is the
limited company guys.

They think if they have several clients at once, that automatically
makes them outside IIR35.

And it’s actually assessed on an individual basis.

So you could have six clients and be inside IIR35 with all of those
clients and therefore should be paying a higher level of tax.

So that’s a big one for me, because it’s sometimes overlooked.

And outside of that, just a bit around if you’ve already got someone
inside the business, I’m going to use a QS as an example again, because
it’s obviously my specialism.

But if there’s already QSs inside that business, you can’t bring in
limited company QS support.

But obviously, if it’s structured correctly, i.e. the contracts are
drafted to be subcontractor engagements correctly, the IIR35 assessment
has been done and has come back outside IIR35.

And you stick into that assessment in practice, you can comfortably work
outside IIR35 as a lot of trades, you’ve just got to scope it correctly.

JIMMY: Yeah, good. Yeah, we’ll come to that. Actually, I’m glad you
mentioned that we will come to that.

Also, I’m glad you mentioned the two year aspect as well, because I
mean, I’m employed.

But I still do a tax return, I claim my travel expenses and stuff like
that.

And we’d always been under the impression that we can’t.

So I’m on the crane, I’m on a constructive site. We’ve always been under
the impression we can’t be claiming if we’re on the same site for more
than two years. Yeah.

How true is that?

MATT: I haven’t come across that before. I’m honest with you. Especially
if you’re employed, I’m not 100% sure.

JIMMY: Yeah, yeah. So it’s basically as long as I mean, if you work a
weekend on another site, then that’s fine. That breaks it up.

But it’s basically saying, yeah, you can’t be on the same site because
that means class is a permanent place of work, if you know what I mean?

MATT: Yeah. So is that I usually get mixed up with that if it’s if
you’ve got if you’ve got your base of work, like your HQ being your
office? Yeah, I claim for that.

But outside site visits or to other offices, you should be able to I
believe if you work, generally, it’s foreseen that that’s the one that
you don’t get expenses on.

JIMMY: Yes, yes, that’s it. Yes. Yeah.

MATT: So realistic, you’re working there the whole time, and probably
not. But if you go to anywhere else, then that’s that’s a travelable
expense, because it’s outside of your yes, yes, that’s it.

JIMMY: That’s it. Before we move on to what you’re just talking about,
we’re going to be talking about umbrella companies, aren’t we? And the
legislation can you clarify what an umbrella company is first?

MATT: Yeah, so an umbrella company is basically a business that
facilitates the payment for a client and a contractor.

It’s essentially a middleman that deals with the tax that should be
paid.

And it just makes life a lot easier for basically everyone involved to
help speed up the payments.

And they can also support clients that, let’s say don’t want to pay
weekly, because it’s quite a bit of a financial burden to have on a
weekly basis.

Most of the construction industry is 30 days in general.

Umbrellas can facilitate weekly payments, but also deduct the correct
tax for guys that are working umbrella, which is generally just for the
rest of this conversation.

Umbrella and inside IIR35 are not the same thing.

But generally, if you go inside IIR35, you utilize an umbrella company
and end up paying more tax.

And that’s why outside IIR35 is more appealing to most people because
you can utilize a limited company and therefore be more tax efficient,
you can take home a lot more of your pay.

So subcontractor is outside IIR35. And inside IIR35 is either employee
or utilize the umbrella company to facilitate those payments.

JIMMY: Right. So am I right in saying that PAYE tax payment, for
example, used to be the umbrella company’s responsibility. But now
liability is shared further down the labor chain.

So HMRC could recover the money from an agency or the client themselves.

MATT: That’s the big change. Yeah. Yeah.

So if we go back to 2021, when I mentioned the shift of the tax risk
change to the private clients, HMRC was basically trying to make people
take more due diligence in bringing limited companies in.

They knew the limited company guys weren’t going to do it.

So they said, right, let’s say Balfour Beatty, Morgan Sindall, take your
pick.

You guys have to, you guys have to check these guys out.

And if you don’t do it right, you’ll be lumped with the tax liability.

So therefore, limited company outside IIR35 was perceived as higher
risk, especially because there was a lot of unknowns around what it all
meant, because it was quite new to a lot of people.

So now, well, from then, most bigger business says everyone’s inside
IIR35. You are all employees. We’re not going to take that tax liability
risk engaging with subcontractors, guys, bonds, and twos and
consultancies.

We’re just going to play the safe route and do that because the umbrella
company will take care of the tax.

And we’re pretty much in a safer position because it’s not going to
expose us to a tax risk.

Now, since the 6th of April, because umbrella companies haven’t been
paying the correct tax in some circumstances as well now, HMRC went,
well, it’s time for the private clients to start taking responsibility
for that supply chain as well.

So the tax shift has shifted again.

The tax risk is shifted to if the umbrellas, if the umbrella companies
are not paying the correct tax or they even potentially go under into
administration, that tax shift comes back up to the client.

So both of them have a level of risk involved now is the key sort of
distinction.

And my main sort of push on this is the minute is there’s a lot more
case law involved now with IIR35 to be able to comfortably have someone
working outside IIR35.

So guys that are working limited company can charge the client a lower
day rate because they don’t have to pay as much tax and therefore can
charge the client a lower amount and work how they want.

The autonomy is of a limited company.

Whereas if you put someone inside IIR35 and suggest that they use an
umbrella, generally that’s most of the market don’t want to do it for
one.

So they’re not working in a way that they really want.

And in my opinion, when the demand is for the talent, the talent will
work how they want.

And at the minute, the construction industry isn’t in a position to
dictate.

It’s generally the guys on the ground are pushing how they work.

QSs will pick from mainly because they’re the most in demand profession
in the construction industry.

They can pick pretty much how much they get paid, where they work, how
often they leave the house. So now we’ll go back to that inside IIR35
element. They generally charge around 20 to 25% more to recoup that tax.

It’s not even perceived as that safe anymore because if an umbrella
business goes under, I’m sorry if I’m getting too granular on this, but
it’s sort of one of the key points.

If one of the umbrella businesses goes under or doesn’t pay the correct
tax and you’ve got 20 guys under that umbrella, which you can do, the
client gets all of that tax.

So it’s a huge lump sum.

Whereas if you’re working outside IIR35, each limited company is
individually assessed.

So they can’t blanket tax you.

And also they brought in an offset tax rule a few years back where
whatever tax has been paid is deducted from the end client.

So it’s not even as onerous and there’s not as much tax burden involved
anymore with that one.

So my main sort of message is for people that have been in the weeds
with umbrella limited company working, it’s shifted now.

It’s not as safe as it used to be.

JIMMY: So is this going to make businesses more cautious about using
contractors? Question.

MATT: I think it’ll give businesses more optionality and potentially a
better way to work with contractors.

I think to answer your first initial question, yes, it will because
there’ll be another learning curve to find out what this tax shift is.

And I feel sorry for the whole construction industry having to put up
with all these blows and punches and changes because it does seem
constant.

But my long-term opinion is that it’ll be really good for the market
because you’ll have, back to the talent point, guys working how they
want to work as long as it suits you properly.

I want to make that bit clear.

It’s not just going to make everyone be outside IIR35 again.

There’s still proper structure that needs taking place.

But what will happen is the bigger clients will choose to actually
address that point now and learn about the legislation and go through
that process properly because it becomes a bit of a no-brainer when you
can get resourced that’s happier for cheaper.

JIMMY: Yeah, yeah, yeah. You mentioned the guys who work how they want
to work. We’ll get on to that aspect, the actual physical work aspect.

I just want to touch on the cost.

If the costs do go up, well, actually, first question, could this end up
costing more somewhere in the chain?

Like, for example, could agencies or umbrella companies increase their
fees because there’s more risk, more checks, and more admin involved?

MATT: Yeah, another great point.

And one that I haven’t actually thought into that too much, but I would
imagine, yes, I think it’ll shake out a lot of the bad actors in the
market.

If there’s umbrellas that haven’t been taking things seriously, they
won’t last.

And then there’ll be a better quality umbrella level that clients will
naturally gravitate to.

A lot of clients will obviously be wanting to get as much of a stringent
supply chain in place but I think now that’ll push to another level
where if you are using those businesses, it’ll probably will come with a
bit more of a premium for that sort of safety and security.

JIMMY: Yeah, yeah. So, refresh me on this. So, if the costs go up then,
does that usually get absorbed by the agency, passed on to the client or
eventually by the contractor?

MATT: Generally, it’ll be the client in most circumstances.

I see the client as the one that’s got the biggest pocket.

And if there’s a small agency or there’s a guy that’s wanting to offer a
service, squeezing them on a couple of pounds compared to the clients,
which I know unfortunately the way everyone looks at it, but it will end
up just be going back upstream to you guys.

JIMMY: Yeah, yeah. Because the agency could put their fees up, put their
rates up, which is going to hit the client anyway. So, yeah, they’re
going to be, yeah, they’re going to be guys.

Yes. Okay. The construction problem.

Yeah. So, you’ve mentioned that some businesses say they can’t have a QS
outside the IIR35. Where does that belief come from?

MATT: For me, the majority of it’s lack of education around the
legislation.

I think if you really wanted to structure a contract properly, you could
have a lot of different trades.

Most businesses want to build their entire team in-house and that makes
perfect sense.

You want to be able to just have a team that’s driving on the same ethos
and also singing from the same hymn sheet, really.

It makes sense, but we’re not in a market where that’s possible anymore.

And contractors will win work in areas that they don’t normally win
work.

For example, someone based in Leeds, one of my clients at the minute
have just won a contract up in the north, further north, up in Scotland.

And to be able to really get going, if you don’t have guys that want to
travel up there, you can start building with contractors and start
getting a reputation in the area and start delivering.

I’ve supported several big clients shift their thought processes from we
can’t possibly have someone working outside IIR35 to actually we can.

And that’s come through generally working with a third party that I work
with called Kingsbridge.

They’re an IIR35 specialist and insurance business, and they’ve got a
third party tool in which it’s way more detailed than most tools that
you can use, the questionnaire.

And it has a lot more questions involved that gives you a more accurate
answer because a lot of guys think that there’s one hard and fast reason
and you are now inside or outside IIR35, but HMRC takes a holistic view
on loads of different factors.

And it’s basically a scale.

Each question answered pushes you one way or the other and the overall
result comes to whatever it may be.

So my logic is if you can just structure something, if you need a
contractor, obviously, you don’t have to take one on board.

But if you need someone for, let’s say, additional support on a work
lift, or someone within your businesses left, and you want to stabilize
that workforce so someone else doesn’t leave and the teams become too
stressed.

You can structure it so they have specific deliverables, a specific
scope.

They don’t work on anything outside of that scope.

You don’t have to keep giving them work after it.

If they weren’t going to be able to come in, they could offer a
substitute that could do the work for them in the meantime, just like a
plumbing business can send James instead of Jed.

It doesn’t really matter who comes, the work’s getting complete.

Simple things like that.

JIMMY: Yeah, I imagine, particularly if a team is already overloaded, if
a business refuses freelance support, then it becomes more of a
nightmare for the current team as well.

MATT: Yeah, it’s a complete backfill cycle that starts, and most
businesses have really stretched teams.

Unfortunately, the construction industry is struggling on all levels,
especially in the commercial market where we look at it.

Stabilized first is a really big thing that we’re trying to push because
it takes a minute, and it’ll be the same for a lot of the other trades
as well.

It takes around four to six months to get a QS through the door now.

So if you’ve got someone leaving within a month’s notice or something
like that, or they’ve just left, sometimes people just leave, there’s a
big period of time there that someone’s, one, going to be stretched, and
two, you’re going to rush into it and just pick who’s ever there and
available because it’s a reactive, and for anyone in your team, from any
level, every single person is important.

So a freelancer can help buy yourself some time, and oversorted, along
with all the other sort of agility that it brings to be able to scale
your workforce as well.

JIMMY: Yeah, yeah, yeah. So yeah, they overload, so they dump stuff, and
people are already there, all that. I suppose another option is they
panic hire, don’t they?

Panic hire and possibly hire the wrong person for the job.

So a smarter move is to bring in freelance help, or maybe clearly define
gap while they find the right long-term person, or even keep that person
in there permanently.

MATT: Yeah, well, the clearly defined scope was 100% right, and then,
yeah, sometimes it does happen where guys go into a business to offer a
service and end up really liking where they’re at, and they end up
working there.

But yeah, the quick hires, unfortunately, I mean, the amount of job ads
that are out there for every profession is crazy, and we think that
that’s generally more of an active market.

If someone’s continuously on a job board, sometimes there’s a reason for
that.

If someone’s not getting snapped up, you see the same names, there’s
probably a reason.

And once again, let’s say if it’s a QS, you’re bringing someone in that
may not be particularly good because you needed to hire fast, that’s
going to cost a lot more than it would have done to just stabilize and
hire the right person, because the amount of margin and sort of costs
that can be missed by the wrong QS ends up sort of defeating the purpose
of bringing them in.

JIMMY: Yeah, yeah, yeah. So this all is a problem that’s created with a
blanket ban, isn’t it?

MATT: Yeah, so blanket bans, funnily enough, there’s a few very ironic
things with IIR35. One of them is the blanket ban. As much as it feels
safe, it’s actually, you can also get penalized for doing that.

A lot of businesses don’t realize that if you look at a workforce of,
let’s say, five project managers, and without actually doing an
assessment, still say, right, you’re all inside IIR35 without actually
proving that you’ve had a look to say why, you can still get penalized
for that.

And a blanket ban across the industry, because most of it come from the
tier one main contractors, shook out a lot of guys.

Rightly so, some guys were employees and should therefore have been
working through a…

MATT: P-A-Y-E route.

But yeah, blanket banning just, it just added a lot of fear to the
market and I think restricts a lot of hiring processes and the other
sort of ironic thing as well.

I mentioned the IIR35 tools that people use to identify whether or not
someone is inside or outside.

HMRC obviously came to the market initially with their version. It’s on,
it’s the main one that most people use. It’s on the HMRC website.

With the case law that’s come out recently, HMRC don’t stand by their
own assessment tool anymore because it doesn’t stand up to case law and
it doesn’t actually stand up to what’s reflective of the nuances that
have been added.

So they’ve come up with the legislation and give everyone this tool to
use and a couple of years down the line said, yeah, it’s no good
anymore.

You’ll have to do it somewhere else because that doesn’t, and it’s like,
it just goes back to my point at the start.

We get given all this sort of pressure to change quickly because there’s
a knee-jerk reaction, but they don’t even give us the tools to do it and
we just have to sort of be more busy and fumble about with
misinformation.

JIMMY: Yeah, yeah, yeah. So have they still got that tool available?
Have they got rid of it?

MATT: Yeah, yeah, they’ve still got it available. There’s a lot of
clients that I speak to that I’ll say, so if you’ve done an assessment,
yeah, this guy’s inside IIR35. We’ve used the HMRC and I’d just say, I
wouldn’t bother.

They won’t stand by it in court. So I don’t think you should, but that’s
one of them. I don’t think it’s been made as public knowledge as it
should be.

So anyone that’s listening, I would recommend using a third party tool
moving forward.

As I mentioned, I personally use Kingsbridge because they’re geniuses
and they’re really good.

They’ve got a guy that just, I think he used to be involved with the
HMRC.

So I think he knows exactly what they’re looking for. But outside of
that, if you’re going to look at it, there’s a great tools out there,
but don’t rely on the free one because that alone definitely won’t be
enough.

JIMMY: Yeah. So I was going to say, what sort of premiums we’re looking
at then for these tools?

MATT: To be honest, off the top of my head, I honestly can’t even
remember.

Luckily for myself, I work in a business where it’s already paid for.

I wouldn’t even want to try and take a guess because I’m not sure, but
to use the assessment tool, I believe it’s a subscription model and that
won’t be much.

I think a lot of the money’s made with these businesses from the PI
insurance and the public indebted insurance that they offer.

But yeah, you have to have a look.

For me, it’s definitely the juice is worth the squeeze because you can
save a hell of a lot of money if you get contractors in properly.

JIMMY: Yeah, sure. Makes sense. Makes sense.

Okay. So when you talk about engaging contractors properly, what does
that look like? Is it about being clear on the work, on the outcome or
how that person is being brought in?

MATT: Yeah. So all three, there are really good points. A clear scope.

So let’s, this is the simplest example. If I had a leak in my bathroom,
I would call a plumber and say, look, I’ve got X pipe is leaking. I
think it needs something replaced.

Can you come and have a look? And they’ll probably diagnose the problem
and solve it. I wouldn’t bring up a plumber and say, can you come and be
a plumber please in my house?

Because it wouldn’t make sense.

Or first of all scope, why does this business need a limited company
resource to come in rather than their own employees that can be as
expansive as you need as well.

It can actually be quite consuming as long as all of it’s in there and
it’s on a specific project.

That’s one, the onboarding process should generally be a lot smoother.

There shouldn’t be any training involved apart from obviously whatever
the basic needs, such as security checks or there’s a lot of e-learning
courses that you have to do to work within a business.

They’re fair enough as long as you’re not sort of adding skill sets to
someone.

Yeah.

And then the engagement has to pretty much stay within, they’re working
on that project the entire time.

And if we want to move them to a different project, we draft a new
contract, do a new assessment, and then we move them over to something
else.

Because the one, one of the main problems is when you have someone in a
business and they’re quite wishy-washy and they become part of the
furniture and they start picking up extra bits, they go to Jimmy’s
christening or whatever it may be.

They just get involved with stuff outside of what they were brought in
to do.

And the other key bits that I mentioned is the contracts.

If you draft a contract properly, so it’s a subcontract engagement and
you’ve got the clauses in there that enables them to provide a
substitute and not have to put timesheets in.

Sorry, and you’re leaving.

It’s a request.

You just say, I’m not going to be in next week. And that’s sort of it
done. The expenses and stuff.

You don’t want to be getting two in the weeds with stuff like that.

If you can just put it into the, into the entire rate and then there’s
stuff paid on top by the contractors to deliver the work.

You can do milestone payments, which are really good.

So it’s like chapters in the story. And every time you get there,
there’s a payment because that doesn’t happen within a permanent
employee situation. You just get paid.

And the main thing with permanent employees, there is less risk because
there’s guaranteed work generally.

Whereas with a contractor, they could be on a one week notice and that’s
done and they can pull the notice for any reason.

And that’s another bit that’s involved with the risk element for the
limited companies.

JIMMY: Yeah, milestone payments. So that’s really useful actually,
because it’s a nightmare for people to wait for long periods for
payment. There’s a lot of pressure that they don’t need, definitely.

So what sort of, what sort of projects are you providing for them? Can
you name drop any like big projects or anything?

MATT: Specific, I’m not involved with like the big HS2s or anything like
that. I wouldn’t bother. It just seems like that one’s been gone on for
so long.

In regards to sectors that I work on, I’m just trying to think of at the
minute, what I’ve got on at the moment, just to give you a bit of a
flavour.

I’m helping a subcontractor down South with some 278 works on some car
parks and some groundworks and things like that.

Up in the North, I’m helping a business with a big refurbishment on a
hotel.

Further North than that, there was a business that I was helping with
build a substation.

That’s up in the North of Scotland.

There’s a hell of a lot of, the North of Scotland at the moment is just
being ripped apart for infrastructure and power on a billions and
billions of pounds worth of work is up there.

An unachievable amount of work in my opinion, because getting someone to
go to Inverness and Motherwell is really hard work.

I didn’t realise how far North those places are and people don’t want to
travel.

Outside of that, a lot of utilities work we get involved with.

We generally don’t close the door to any sector because as long as they
can facilitate a QS, we can help them.

Utilities, battery parks, waterworks, gas mains and stuff like that,
that’s all essential work.

It’s really good to be a part of.

Regards to name dropping, unfortunately I don’t have anything exciting
enough where people know. It’s generally, I sit on the tier two, smaller
tier one so there’s nothing massive at the moment.

JIMMY: Okay, it’s interesting.

It’s interesting to have two people from different areas on the QS side,
because you’re mainly UK based, but I interviewed someone who’s based in
the Middle East who does a lot of the giga projects out there.

And speaking about how what’s going on out there is affecting them also,
how it can filter onto us.

So it’s quite interesting how that played out.

So you don’t get involved with any of those projects, but also we
touched a little bit on how over-scheduled and over-budget some of the
projects are going over here.

Like you mentioned HS2 and Hinkley Point as well, that’s just gone way
over budget.

MATT: Yeah, well I think a lot of people are worried about AI within the
construction industry and I think across the board, everyone’s a bit
concerned about the jobs being taken off them.

But we had a stat from The Click, one of the roundtable events two weeks
back, and one of the more experienced guys in the room was basically
trying to make the point that we could probably do with some more
efficiencies anyways, because don’t quote me on this, but I think it’s
up in the high, like around 90 to 98% of construction projects are late.

When was the last time you really worked on a project that was delivered
bang on time?

It’s almost like written in as fact that you’re not going to get there.

It’s almost pointless putting a date on it.

So he was saying that fair enough, let’s bring some AI in and take some
work off people’s desks, because we’re not delivering what we’re
supposed to do.

But the key thing with the construction industry, where AI can’t really
do much at the minute anyways, is it starts with shovels in the ground
on a site and it’s people and it’s one of the slowest moving industries
in the world and always has been, because it’s still people delivering
civil engineering and constructions and things like that.

And he made the very good point that we all feel we’re busier and we’re
just busier.

AI is allowing ourselves to busy ourselves with more crap, basically.

We feel busier, but it’s just because there’s more extra stuff to do and
at the end of the day, the main thing isn’t getting done.

So yeah, a bit of a side note on AI, but yeah, it’s one of my main
points I tried to say, it’s crazy how accepted it is.

And that’s why I think maybe bonuses and stuff and completion on time
would be good for individuals within a business because they’d be
motivated to get it done.

I work in a sales environment where it’s all incentivized and I love it
and I work harder because of it.

And I think if you’re incentivized, I know there’s bonuses and stuff,
but I think that would help the construction industry finish things up a
bit quicker.

JIMMY: Yeah. Well, there are penalties, aren’t they? They do penalties
for certain entries.

So maybe bonuses might be a bit of a softer approach or balance out a
little bit. Yeah. Okay.

So let’s close the question for you. If you could leave construction
firms with one bit of advice for using contractors over the next 6 to 12
months, what would it be?

MATT: I would probably say if you do what you’ve always done, you’ll get
what you’ve always got.

So if you think you’re not going to be able to change to this recent
shift that I’ve been talking about, then as much as it feels like an
upheaval to do it, and there will be a lot of internal education and
changes, it’s going to happen anyways.

And businesses that are going to adapt to this change will probably be
better off in the long run.

So I’m not saying go out there and use contractors outside IIR35 because
you may not need them, but they are really handy to be able to have in
the background because a lot of the best guys will only work outside
IIR35.

So therefore, get someone in your business that’s trained up on getting
education piece involved and just start learning what the key changes
have been recently.

And then, yeah, if you get to that point, then hopefully you’ll be able
to have more optionality because I get about five or six messages a week
on LinkedIn, specifically just QSs that want to go a work limit company.

That won’t change because unfortunately the tax burden within the UK is
just continuing to eat away at us and with the silent inflation that’s
kicking on, guys are looking for ways out to make more money and the
only other option is contracting.

So to answer your question, the market’s wanting to do that.

So be the business that can facilitate it properly.

JIMMY: Good advice. Nice. Like it.

Well done. Insightful answer that. So another closing question.

Is there anything that you’d like to ask me?

MATT: What’s your favorite soup?

JIMMY: Wow. Favorite soup. Do you know what?

I don’t really like to have favorites of stuff. My daughter even takes
piss out of me for this because she has just asked loads of random
questions. What’s your favorite song?

What’s your favorite? I haven’t got one, but I like, I like minestrone
and I like oxtail. Oh, nice.

MATT: Yeah. Yeah. Yeah.

JIMMY: Yeah. I actually did. So when I was a groundworker, especially
out in the winter, it’s all about fuel.

So it doesn’t really matter what you eat. You just got to get fuel and
you have to keep your body going. So I used to make, we used to do like
tuna pasta bake the night before, put it in the fridge.

But before I put it in the fridge, I used to make a cup of soup and put
it in it. Oh, really? Yeah.

MATT: I used to put it in it because you don’t get in yet.

JIMMY: No, because the reason being is, you know, it’s like pasta in the
fridge in the morning. It’s like rigid and cloggy. It’s a bit dry.

So it’s just a bit like, so the cup of soup, you should just keep the
moisture in and add that flavor.

So in the morning, just be nice and succulent and have that extra, extra
oxtail flavoring.

So little tip out there for you or you people out there or on a budget.

MATT: That’s better than any piece of advice that I’ve just given. Yeah.
So there you go.

JIMMY: So yeah, yeah. They’re my favorite soups. So good, good question.

Thanks for your time, mate.

MATT: You’re really insightful. Thanks for having me on, mate. I
thoroughly enjoyed it.

JIMMY: Good. It’s an absolute pleasure. I hope you got all your points
across that you wanted to.

MATT: Yeah, yeah. I know for me, that was like, it was just an awareness
piece. I think it’s gone a little bit unnoticed.

And I just think a lot of the guys that are struggling should just have
a look at it.

JIMMY: Yeah. Good man. Good man.

So lastly, where can people find you if they want to reach you?

MATT: So I’m Matt Williams, a clear north on LinkedIn. I’m very active
on LinkedIn and try to just offer as much value as I can within what I’m
hearing in the market. It’s construction led, but it’s very commercial
focused.

So it will be more QS orientated, as you can imagine.

And then as a business, Clear North, I believe it’s Clear North.co.uk or
clearnorth.co.uk will come up on some level.

If there’s any businesses that are screaming out for quantity surveyors,
that’s obviously our market and we’re pretty good at it.

JIMMY: Yeah. Good, good, good plug. Nice one.

Well done. Okay, mate. Enjoy the rest of your Sunday.

I’m going to stop recording now. Thanks very much. Nice one.

We’ll keep in touch. Bye-bye. Bye-bye.