Change to claiming CIS deductions
From April 2022 there is a new requirement that companies must meet to be able to reclaim Construction Industry Scheme deductions suffered, as Anil Patel explains.
You might also be interested in
Anil has over 35 years of experience assisting clients with employment tax and Construction Industry Scheme matters having worked as an employer compliance officer within HMRC, a manager within KPMG and an associate director within Grant Thornton. Anil now operates an independent consultancy, EmphaCIS Tax Consultancy Ltd, supporting clients of...
Replies (5)
Please login or register to join the discussion.
The whole CIS system needs to be scrapped and a new one put in place. Whilst I was still practicing (now retired) I had come across countless discrepancies between what HMRC had in its records as the "correct" CIS deductions for a particular individual or company which were in fact incorrect. This caused long delays in CIS repayments, additional costs for contractors and sub-contractors and in some extreme cases caused businesses to close due to lack of funds.
What a load of cobblers "on the grounds of fraud". In the days of district offices any discrepancies would be sorted in 5 to 10 minutes. It wouldn't be as bad if HMRC said our figures do not agree, this is what we've got, please let us know what the difference is.
If there really is that much fraud then time to get rid of CIS.
So the change is ADD UTR, You know the thing they asked for before they permitted you to have a PAYE scheme
What a complete pointless exercise, but one which will lead to massive error as so many will not know that there is a new box to complete
HMRC, still not able to to join up the two dots
I feel embarrassed when I have to explain to clients how incompetent the UK tax system is
"Changes from April 2021
Given HMRC’s concerns (as per list above), new legislation was introduced to enable HMRC to amend a contractor’s EPS where:
evidence of the CIS deductions suffered is not provided, and/or
the contractor does not amend the EPS to reflect the correct amount of CIS deductions being claimed
The new powers were introduced by amendments to section 62 FA 2004 (introduced by FA 2021) by inserting new subsections (62(3A), 62(3B) and 62(3C)). The CIS Regulations (SI 2005/2045) were also amended by virtue of SI 2021/321."
Have I missed something?
Are HMRC expecting paper certificates of tax to be sent in the post? Every month?
"evidence of the CIS deductions suffered is not provided"
Paul Crowley asks if he has missed something about evidence of deduction not being provided, as stated in the article. What the article does not say is that evidence is only to be provided if HMRC ask for it (regulation 24C of SI 2005/2045). And it must be provided electronically it seems (regulation 24B).
What I find very odd about the new regulations is that they are predicated on the assumption that a company in receipt of CIS payments from which amounts have been deducted must claim to set those amounts against PAYE & CIS liabilities. This is stated in the amendments to s 62 FA 2004:
“(3A) Regulations under subsection (3) may include provision authorising an officer of Revenue and Customs to—
(a) correct an error or omission relating to a set-off claim;
(b) remove a set-off claim;
(c) prohibit a person from making a further set-off claim, for a specified period or indefinitely.
…
(3C) In subsections (3A) and (3B), “set-off claim” means a claim for treating a sum deducted under section 61 as paid on account of any relevant liabilities.”
It is not so – set-off is automatic by virtue of s 62(3).