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Building work | accountingweb | Reforming the CIS Consultation
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HMRC aims to simplify Construction Industry Scheme

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The scope of the Construction Industry Scheme can be confusing, so HMRC has launched a new consultation seeking views on how to simplify it.

19th May 2023
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HMRC’s drive to reform the way in which the Construction Industry Scheme (CIS) works continues with the publication of a new consultation.

While things have gone quiet in relation to one part of the consultation published on 19 March 2020 (supply chain due diligence), HMRC published a new consultation on 27 April 2023 relating to:

  • strengthening the gross payment status tests
  • treatment of payments made by landlords to tenants
  • reducing the administrative burden for certain contractors, and
  • further simplification of the CIS.

Fraud and loss of tax

HMRC believes that the construction sector continues to present significant risk in terms of fraud and loss of tax. It continues to review the manner in which CIS is operated to combat the risk of any loss, particularly in an ever-changing sector.

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Replies (8)

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By philaccountant
19th May 2023 16:09

Would be nice if they would fix the online application system. Every time I've tried to help a client apply we've just been sent round in an infinite loop on the website.

Thanks (0)
RLI
By lionofludesch
21st May 2023 05:11

Why don't they fix the easy stuff first? CIS celebrates its golden jubilee soon and a subcontractor still can't get a statement of how much tax HMRC hold on his behalf.

Thanks (3)
Replying to lionofludesch:
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By silverghost
22nd May 2023 09:57

This has been proposed but deferred pending the introduction of MTD.

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Replying to silverghost:
boxfile
By spilly
22nd May 2023 11:22

So not for at least another 5 years then.

Thanks (1)
Replying to spilly:
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By johnjenkins
22nd May 2023 11:49

I think HMRC are taking Winnie's quote literally when he said "success is failure after failure but not losing enthusiasm".

Thanks (1)
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By johnjenkins
22nd May 2023 10:18

CIS was set up as Contractors and Subcontractors with some that could be both.
It was set up because people were signing Mickey Mouse etc. for their money so there was little trace on who was receiving money.
IMV it worked very well. Of course with any system there is scamming (as can be seen today in any industry, even loan applications). HMRC then decided to change the rules to get more money (trying to re classify the "subcontractor" into a PAYE status). That is never going to work as has been proved by countless court cases lost by HMRC. (I shudder to think the net cost of interfering with employment status). So by "simplifying" read "how can we get more money".

Thanks (1)
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By anthonystorey
22nd May 2023 10:57

Getting rid of the Reverse Charge would be a good start to making things easier.

Thanks (1)
Replying to anthonystorey:
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By johnjenkins
22nd May 2023 11:11

They won't do that as they will lose money.

Thanks (1)