Construction Industry Scheme: Guidance and Commentary 4th Edition

A practical guide to dealing with the requirements of the Construction Industry Scheme, based on years of experience gained by the author in representing clients, liaising with HMRC and working in the construction industry.

This book complements and expands upon HMRC’s publication CIS 340. It includes observations on the various CIS consultations held by HMRC and responses issued thereafter.

The fourth edition has been substantially updated, including an array of new case decisions.

New for this edition:

• VAT compliance is now included as part of the tests for granting, retaining or revoking gross payment status
• New data in respect of the number of self-employed workers and employees in the construction industry, the number of sub-contractors paid each month and the number of penalty notices per month
• The possibility, in future, of including CIS deductions in pre-populated self-assessment returns
• The potential impact of modern methods of construction, particularly modular construction, and HMRC’s response to this
• The new reg. 20a removing work necessary for a tenant to occupy a property from the scope of CIS
• The CIS treatment of licences
• New HMRC guidance on reverse premiums
• The process used by HMRC to notify a change of status of a sub-contractor to a contractor and the consequences for contractors who fail to act on such notice, including reference to the Regency Site Personnel Ltd case
• A note that overseas companies may try to establish a base in the UK to avoid the 30% deduction, but this is hindered by lack of HMRC resource to assist them
• The effect on gross payment status of self-assessment tax returns that are submitted late
• The new requirement for businesses granted gross payment status for the first time to have a review following the first six months
• Discussion of the Pawlikowski case re missing deduction statements
• The new requirement for requests for missing deduction statements to be made in writing rather than via the CIS helpline
• Recent HMRC information-gathering initiatives
• The additional reg. 13 and 19 cases Regency Site Personnel Ltd, Gallagher’s Windows, Doors and Conservatories Ltd and Access Contracting Ltd and particularly Beech Developments and others, which have established (subject to potential appeal) that a direction under reg. 9 could be made even after a reg. 13 determination had been raised
• The discussion of many test cases has been updated
• Outcomes of the 2023 consultation
• A new chapter discusses the lengthening of supply chains, HMRC’s thoughts on the matter and potential future reporting implications
• Comments as to how the CIS has no mechanism to offset automatically unclaimed deductions or to notify affected taxpayers of amounts that they are owed