Policy paper

Draft legislation: improving the operation of the Construction Industry Scheme

Proposed amendments to existing regulations to implement changes to the Construction Industry Scheme (CIS).

Documents

The Income Tax (Construction Industry Scheme) Amendment of Schedule 11 to the Finance Act 2004) Order 2016

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Explanatory memorandum to the Income Tax (Construction Industry Scheme) Amendment of Schedule 11 to the Finance Act 2004) Order 2016

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Details

At Autumn Statement 2014, the government announced it would implement improvements to the operation of the CIS. In particular, the government proposed to enable more subcontractors to receive payments without deduction on account of tax by:

  • reducing the threshold for the turnover test from £200,000 to £100,000 where there are multiple partners or directors, from April 2016
  • simplifying the compliance test to focus on fewer compliance obligations from April 2016, enabling more sub-contractors to receive payments without deduction

and to:

  • introduce mandatory online filing from April 2016
  • mandate online verification, where the contractor checks the sub-contractor’s tax status with HM Revenue and Customs (HMRC), from April 2017, following implementation of improvements to the service in 2016 to 2017

There was broad support for these proposals which were part of the 2014 CIS consultation package.

HMRC has published draft regulations, together with a draft explanatory memorandum, for a period of technical consultation which will close on Friday 22 January 2016.

Any comments on this draft should be sent to Andy Thomas by email: Andy.Thomas@hmrc.gsi.gov.uk or Telephone: 03000 589714 before the above deadline.

Published 9 December 2015
Last updated 5 May 2016 + show all updates
  1. Details of the Administrative burden impact of the Construction Industry Scheme (CIS) reform has been added.
  2. First published.