FEATURE CHAIN REACTION
With so many stages and suppliers involved in supply chains, disruptions and vulnerabilities can occur at any point. Risks need to be assessed, monitored and managed to avoid disruptions and ensure the performance, compliance and reputation of your business remain intact. Ian McKinnon at CHAS highlights 10 ways to mitigate supply chain risk in 2021.
1.
BE READY FOR BREXIT DEADLINES Anyone settled in the UK for more than five years
as of exit day (31 January 2020) is likely to be able to gain ‘settled status’ which will grant them the same rights as British citizens but they only have until 30 June 2021 to apply.
There are concerns that language barriers and a lack of awareness of the need to apply may prevent some workers from completing the application. A sudden exodus of staff could compromise health and safety as well as business continuity so businesses should ensure everyone in their supply chain is aware of the need to apply for ‘settled status’ and offer assistance where required. The application can be accessed here.
2.
PREPARE FOR IR35 CHANGES Delayed IR35 changes, which govern whether an
individual working as a contractor or freelancer ought to be deemed an employee on payroll for taxation purposes, are due to go ahead in April 2021.
The changes mean medium and large businesses will be responsible for determining whether IR35 applies and could face financial penalties for non-compliance. Companies who haven’t done so already should audit their current contractor base and determine who falls inside and outside of IR35 using the HMRC’s CEST tool, which can be found here.
Once businesses have determined where IR35 applies they should communicate with existing contractors and put processes in place to determine if the off- payroll rules apply to future engagements.
3.
FAMILIARISE YOURSELF WITH TOUGHER PAYMENT RULES
From April 2021, contractors bidding for Government contracts above £5m per annum will need to be able to pay at least 85% of invoices to their supply chain in 60 days and have an action plan for how they will pay 95% in 60 days. Contractors who fail to meet these requirements may be suspended from winning any further government contracts until their payment performance improves. For more information, see here.
4. 44
CHECK YOUR SUPPLY CHAIN IS COVID- SECURE
Coronavirus vaccination developments are good news but they are not a quick fix; businesses will need to continue to manage the risk of Coronavirus in 2021. This includes checking the issue is being taken seriously throughout the supply chain and looking for
evidence that contractors are committed to COVID- secure practices.
Anyone who regularly employs contractors can access a database of companies who have completed a COVID-secure Statement of Best Practice for no charge via CHAS’s free Client Portal.
5.
REFOCUS ON HEALTH AND SAFETY Coronavirus has been a significant distraction in
2020 so it can be beneficial to reinforce expectations around health and safety, particularly if you have been diversifying your supply chain.
It’s crucial to ensure all contractors understand their obligations around health and safety and have the correct management systems in place. The easiest way to do this is to choose a contractor who has been accredited by a third-party assessor. CHAS’s free Client Portal provides access to a database of accredited contractors who meet a wide range of health and safety assessment criteria.
6.
CONTROL CARBON Sustainability is rising rapidly up the construction
industry’s agenda with many companies making public commitments to accelerating their journey towards carbon neutrality and asking their supply chains to do the same.
It is becoming commonplace for businesses of all sizes to track their carbon use via tools such as CHAS Plant, which monitors all of the plant being used on a site and helps meet regulatory obligations like Non-road mobile machinery (NRMM).
Many businesses are also embracing circularity, which involves eliminating waste and finding ways to continually use resources. For more on building a circular economy implementation plan see Circulytics, a free digital measuring tool from the Ellen MacArthur Foundation.
7.
KNOW YOUR WORKFORCE Knowing workers’ identity before they are allowed
on-site and being confident that they are qualified and have the right to work can help prevent illegal working, manage health and safety risks, and ensure supply chain security.
Consider whether your current workforce credential management processes are comprehensive enough. Are you confident of everyone’s identity on your site, their right to work, and their competence? Systems such as CHAS People which streamline workforce
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