CIS Changes

22nd June 2016

CIS: Big administration changes.
With effect from 6 April 2016, a lot has changed within the CIS processing sector:

  1. The abolishment of the paper return,
  2. Amendment to the nil return obligation,
  3. Changes to the Compliance and Turnover tests when applying for Gross status.

Paper seems to be a thing of the past and so HMRC will no longer accept paper CIS returns from contractors. All returns will need to be e-filed, either via your HMRC online account or with the relevant software. With this new legislation being actioned, we may see that HMRC become stricter with late filing penalties, as their records will update with greater accuracy.

With the Turnover test being reduced from £200,000 to £100,000 for companies with multiple directors, we will see that previously ineligible companies will now be able to pass the turnover test. It is worth knowing that sole traders and single director companies are still required to earn above the £30,000 threshold in order to pass the Turnover test. HMRC have said that contractors are no longer required to submit a nil return if they have not made a payment to any subcontractors, although a late-filing penalty will automatically be issued by HMRC’s systems because they will still be expecting a return of some form, you can easily appeal to have the penalty removed.

Gross status is a perk worth having for most construction companies, and with the tests being simplified, HMRC predict it could affect approximately 90,000 subcontractors which currently operate under Net status – 20%. For the Compliance test, the director’s individual self-assessment obligations will not form a part of the initial or annual compliance tests, instead the company itself will be reviewed to determine whether you are eligible for Gross status.



 
Other items in Blogs
 
Neil Groom
12th October 2017 Trust Registration Service

  HMRC has released guidance for trustees and their agents for the new online Trust Registration Service (TRS) which has been operating since the middle of July. The new service replaces the old form 41G, as well as a section of the trust tax return used to report changes in trustee contact details.   Trusts…

Read More »

Mark Burrows
11th October 2017 Making Tax Digital – will free software be available?

  When Making Tax Digital (MTD) was first announced, HM Revenue & Customs said that free software would be available for the most straightforward small businesses.  Under MTD records of business income and expenses will be required to be kept digitally using a software product or app.   HMRC have since provided clarification on which…

Read More »

Thomas Carter
11th October 2017 Xerocon London 2017

Two fantastic days at Xerocon London on 4th and 5th October as 2000 attendees from 24 countries descended on the ExCel, the annual event for Xero Partners. Over the two days, four of our staff: Tom Carter, Dan Coleman, Steph Tinkler and Chip Moore attended the event. It was an opportunity to learn about new…

Read More »

Philip Peters
5th October 2017 HMRC “Connect”: Now checking businesses that should VAT register.

We have known since 2010 that HMRC has a computer programme, called “Connect”, that is collecting data from a variety of sources about taxpayers, and then using this intelligence to check on correct tax compliance. We have known that these data sources include Banks, Social Media, DVLA, Local Authorities, Foreign Tax Jurisdictions and Land Registry.…

Read More »

Catherine Hubbard
5th October 2017 Simple Assessment

  HMRC have now implemented their ‘Simple Assessment’ project, where they use the information already available to them from employers, pension providers, the DWP and banks to calculate the tax for those with straightforward or ’Simple’ tax affairs, without the need for a tax return to be completed.   In theory this sounds like an…

Read More »

Julie Quayle
27th September 2017 Parental Bereavement (Pay and Leave) Bill Introduce to Parliament

  For the first time, parents who are employed and have suffered the death of a child would receive statutory paid leave to grieve, under a new law being supported by the Government. Currently, employees have a day-one right to take a “reasonable” amount of time off work to deal with a family or dependant…

Read More »