Average construction profit down £3,000 as a result of the pandemic

Research by tax refund experts, RIFT Tax Refunds, finds construction contractors earn £3,000 less a year than before the pandemic.

While almost all industry in England has come to a standstill during the pandemic, construction workers have continued under increasingly difficult circumstances and strict social distancing rules. Contractors have played a central role in driving the country forward and laying the foundations for the UK economy for a strong post-pandemic recovery.

Despite this, new research from RIFT shows that their revenues have been significantly impacted since the pandemic began.

In December 2019, just before the start of the pandemic, construction contractors in England earned an average of £49,296 a year. Fast forward to today and the latest figures show average earnings have fallen by -£2,860, or -5.8%, to an average of £46,436.

Contractors took the biggest pay cut in the North East where earnings fell by -£4,900 a year, or -12.2%, followed by the West Midlands (-11%) and the East of England (-5.7%).

It looks like the construction industry is paying the price for a problematic pandemic period which has seen the cost of materials soar, with people working in the sector taking a hit to their incomes to compensate.

There is, however, good news. Due to the nature of their work and having to travel to several different sites in the same year, construction workers are among the most likely to be owed money by HMRC.

In addition, the amount of money contractors can claim as tax refunds from HMRC has actually increased. In 2019, the average one-year repayment was £1,894 whereas today it stands at £1,993, an increase of 5.2%.

Additionally, tax refunds can be waived for four years, meaning that if a subcontractor hasn’t made a claim before, they can claim up to four years of refunds. The average payout for this is £7,972, having risen by £395 since before the pandemic.

Bradley Post, CEO of RIFT Tax Refunds, commented: “It is disappointing that while construction contractors have gone out of their way to maintain nation building during the pandemic, they have actually seen their wages drop by almost 6%.

“It is made even more unpleasant by the current cost of living crisis, which means that every pound and every penny is more essential than ever.

“However, while their salary package may have shrunk as a result of the pandemic, we have actually seen an increase in money owed to the sector by HMRC. In fact, the average tax refund has actually increased of almost £100 with the average worker recovering almost £2,000 in money rightfully owed to them.”

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