The Construction Industry Scheme recently underwent a revamp, and the new scheme came into effect from 6 April 2007.
The new scheme puts an awful lot more responsibility back on to the employing contractor than ever before, not really helping with reducing all that red tape is it Gordon?
The argument put forward for the new scheme by the ‘powers that be’ was that its aims are:
- to reduce the regulatory burden of the Scheme on construction businesses
- to improve the level of compliance by construction businesses with their tax obligations
- to help construction businesses to get the employment status of their workers right.
The reality is that the construction business now has to verify the contractor and this will decide what rate of tax is deducted if any. Verification is done by contacting the Revenue.
It will probably improve the level of compliance, after all returns will have to be submitted monthly, contractors verified etc. so yes compliance will increase, and that’s a good thing, well if you work at HMRC it is, as for the poor small building business, this will cause even more stress and pressure because compliance takes time and costs money.
Thank god this government says small business is important, imagine what they would do to us if they didn’t think we had a role to play?
Remember, your CIS returns have to be in by the 19th of the month, failure will now result in penalties, fixed fines are £100 with a further penalty for every additional month the return remains outstanding.
Penalties may not have yet been levied, but from experience to see back dated penalty notices issued would not be a surprise!
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