Revenue postpone implementation of scheme to allow industry time to comply.

The government has put back the full implementation of the new CIS scheme until April 2007. The Construction Confederation has promised that cooperation between HM Revenue and the industry will be strengthened after the government conceded that plans to bring in the new tax scheme by April 2006 were unworkable.

There had been fears that the computer systems at HM Revenue and Customs would collapse as Britain’s constructors all tried to meet the deadline, and that it could lead to widespread deductions at the emergency tax rate of 30%, sending many smaller firms towards bankruptcy.

The Construction Confederation said that the extra 12 months would be used carry out a full, joint testing programme, while the Revenue would offer more advice on compliancy, with 70 people staffing a telephone helpline and interactive software available online.

Stephen Ratcliffe, chief executive of the Construction Confederation, said: “We’re delighted the Revenue has seen sense. We want an electronic scheme but we want one that works. There now has to be a complete timetable drawn up between now and April 2007.”