New CIS – how to stay registered for gross payment. By Rebecca Benneyworth

Seems like the advice to all gross contractors is to get a gross cert. for a subsidiary operation with only one director (the Pope) and keep it squeaky clean with payments/compliance.
Then occasionally pay the CT/VAT/Sa in the main operating company/partnership?

They were devastated - accused of being late with ONE payment, then told their large contracting business was effectively being killed off.

There are some lessons here. Despite the impression created in Leaflet CIS343 that it is a "three strikes" policy, if only one payment is more than 28 days late, that is enough. See http://www.hmrc.gov.uk/manuals/cisrmanual/Pdfs/cis343.pdf. To me this should be more clearly stated in the notes.

In our case I have asked the Appeals Inspector to immediately strike out the Notice because the payment was only 23 days late and I have pointed out that in addition, the date they processed the payment may be some days after the day they received it.

Happily the client also has cheque stubs to prove that the original payment went astray and was replaced with another immediately upon receiving a reminder phone call from HMRC so they have Reasonable Excuse.

I agree with the comments about the Police State. We are talking about often large businesses here. With credit becoming difficult we all know there is Trouble Ahead. One delayed payment and all your customers get a letter from the Government libeling your business. "We will write to tell all the contractors that have previously paid you for work within the Construction Industry Scheme that all payments made after the period of 90 days from the date of this letter should be paid after a deduction has been made from that part of your payment that is for labour"

HMRC may accelerate the downfall of construction businesses, driving us further into recession by this over-exuberance. Thanks guys!

Actually it is a bit like Episode 1 of Blakes 7 where he gets found guilty by the Computer. Or Little Britain - "Computer says No!"

i have just had a client lose gross for
"A corporation tax INTEREST charge of £266 due on 29/6/07 was not paid in full until 10/10/07"

yep, a tiny bit of interest, and not even a warning that if you commit such an appalling crime again we will bin you.
it's like losing your driving licence for getting a parking ticket.

oh and of course with the notice there is no evidence provided to backup this accusation, they don't have to.--> it's easier to cause massive stress to the oppressed small business involved and sit back.....
Oh and of course there is nothing in the books of the company remotely resembling the numbers quoted either!

Please can i go live in a fascist totalitarian state where i can be free

don't civil servants just love their power under this new system..!

I understood that the facility to offset deductions had been extended from the start of this tax year to cover sole traders and partnerships, but I'm afraid I can't remember where I read this.

I would suggest in response to John Jenkins that possibly "The Lump" has gone down, but the amount of small contractors sliding back in to the Black Economy may be on the increase, as all too many just cannot cope with additional paperwork, nor can they afford someone else to do it for them.

The old system of SC60 forms seemed to work; if those recipients of the forms chose not to make correct returns, the Revenue still had their money. The paperwork for contractors was quite simple, and most managed to comply.

Back to the Good Old Days?

It appears to be indicitive of the "nanny state" that, we, as advisers take responsibility for our clients' lack of knowledge.
Most contractors know the score and if they fail the "compliance test" then that is thier problem so why should advisers consider "reminders etc. etc." unless, of course, the client is willing to pay for the service. Highly unlikely in the building game.
HMRC will eventually go round in circles with this new CIS and no doubt in a couple of years we will have a BNCIS.
Time to get rid and bring the Construction Industry in line with other Industries because the reason for CIS in the first place, the lump, is no longer with us nor will it ever be able to return.

Company with y/e 30/11/06 makes a payment of £80k on 5 September 2007. Accounts etc not finalised until 30 September 2007 (in time to meet Registrar's filing date) but final CT bill is now £120k. £40k paid 30 September 2007. Is this a late payment outwith 28 days, and so failing the compliance test, or is the £40k simply a "shortfall in that payment [the £80k]" such that the obligation to pay CT on time is treated as met?

I don't quite understand what the reference to "any shortfall in that payment" actually means. If payment is late, then by definition there has been a shortfall.

Can anyone clarify, please??