National Federation of Builders is to assess the level of computer literacy among its members to find out how many will be able to handle an online tax system.
The heat is on. In barely two years, the CIS tax system will be put totally online by the Inland Revenue. And many smaller contractors do not have the computer skills to cope with the changes.

Over the next six months, the contractors will have to make a thorough analysis of the way they use IT 鈥� encouraged by the National Federation of Builders. Barry Stephens, the NFB's chief executive, is concerned for his members: "I suspect that a substantial percentage of the industry is ill-prepared," he says.

His fears could well be confirmed in an NFB survey that begins this month. A questionnaire, designed by the Construction Industry Computer Association, will be sent to about 3000 small and medium-sized contractors. It will cover what hardware and software they use and how much they use electronic procurement, email and the internet. The results will be analysed and used to help the NFB to develop training and support services to help the less IT-literate companies.

Stephens believes that the government must do more to enable contractors to become compliant. He said: "There are real issues to address if firms are to become fully e-business driven. Who is going to provide the software to interface with the Inland Revenue? If the government proposes such a radical change in the way the scheme is administered, they should provide the software, at no cost, to enable people to provide the information required."

Stephens is particularly concerned for smaller firms: "Government must be understanding of the challenges for small traders who perhaps rely on their wives and who might not have enough formal training to do accounts."

A spokesperson for the Federation of Small Businesses echoed Stephens' comments, saying that in business, as in the wider community, some people are simply not computer literate.

I suspect that a substantial percentage of the industry is ill-prepared for these changes

Barry Stephens, chief executive, National Federation of Builders

He said: "We're extremely concerned that the 10% or so of small businesses that aren't used to using computers might find themselves in huge amounts of trouble; 2006 is over-optimistic." Help is available. The Construction Confederation has looked to help its members by publishing A Beginner's Guide to E-Business in Construction, which it hopes will allay the fears of technophobes in the industry.

The confederation is also confident that there is still enough time for smaller contractors to get up to speed. A spokesperson acknowledged the problems, but added: "It's the fear of the unknown, rather than the ability to grasp the knowledge. It shouldn't be a problem, but we're not being complacent."

And there are incentives for contractors to become compliant sooner rather than later 鈥� those who start filing their tax online in the next few months will get tax-free cash incentives, as much as 拢250 for 2004/05.