CIS Scheme

Has anyone up to date info on changes taking place please? I read last year that the voucher scheme was going to be abolished.

Hilary

Reply to
THOMAS FLETCHER
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Construction Industry Scheme

The Government?s proposals to reform the construction industry scheme (CIS) will take effect from April 2006. Following a period of consultation, the draft primary and secondary legislation has been published, supported by a set of explanatory notes. Subject to further feedback from interested parties, the primary legislation will be included in the Finance Bill in 2004 and the Regulations will be introduced after it receives Royal Assent. There will then be a period of about a year and a half for the Industry and the Inland Revenue to prepare.

The principal changes to the CIS are as follows:

The registration process will continue unchanged, but applicants will also be able to apply using the Internet. There will still be a requirement for the subcontractor to complete an application form and attend a local tax office with two proofs of identity, including evidence of current address and NI number.

In place of CIS4 cards and CIS6 certificates, a verification service will require contractors to inform the Inland Revenue by telephone, letter or Internet that they wish to take on a subcontractor, provide the subcontractor?s NI number and make a declaration that the subcontractor?s employment status has been checked. Verification will be confined to subcontractors who have received no payments from the contractor in the current and two previous tax years.

In place of vouchers, the contractors will file monthly returns, giving details of the subcontractors that have been paid, how much has been paid, the material costs included in the payments and, where appropriate, how much was deducted on account of tax. The returns will include a signed declaration that none of the subcontractors are working under a contract of employment and that they have all been verified with the Inland Revenue as being registered subcontractors. A copy of the return will be given to the subcontractors for them to check for accuracy.

Filing of the monthly returns may be made by paper or electronically, The Revenue intends to introduce an approval scheme for software that can send electronic returns.

There will no longer be any annual returns as all the necessary information will be provided on the monthly returns.

A new computer system will allow returns to be made electronically, support the verification system, and identify non-compliance.

To support the employment status declarations, the Revenue is looking at a number of possible options, one of which includes a new computerised tool that would give guidance on employment status.

As many CIS contractors have to handle emergency out-of-hours work, the Revenue is considering the need to operate the CIS call centre round the clock. The computerised support system will also have to be capable of verifying subcontractors via the Internet at any time of the day.

There will be no requirement for existing card and certificate holders to re-register under the new scheme.

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Reply to
Troy Steadman

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