In case you hadn’t noticed, the Inland Revenue is having another go at reforming the Construction Industry Scheme, with the new system coming into force next April.

There is a six-month grace period when innocent mistakes will not be punished. After that contractors will face penalties of up to £3,000 for false declarations of employment status, with £100 fines for late returns.

The Construction Confederation (CC) wants the revenue to extend the penalty-free period to a year. Chairman James Wates has sent a pre-budget letter to the Treasury expressing this view.

The main changes to CIS are:

  • Contractors will have to “verify” whether they should be paying a subcontractor net or gross. This replaces cards and certificates.
  • Contractors will report on payments and deductions to subcontractors using monthly returns rather than the existing voucher system.
  • In the monthly return, a contractor must declare that it has checked the status of the subcontractor and that it is not an employee.

Source

Construction Manager