CIS: Welcome relaxation in red tape.
The government has announced that it will implement a package of improvements to the CIS. The stated aim of the changes is to reduce the administrative and related cost burden on construction businesses. The measures should result in more subcontracting businesses being able to achieve and maintain gross payment status; so improving their cash flow. These changes are to be implemented in stages. From 6 April 2015 the following amendments have been made to the system:
- The requirement for a contractor to make a nil return to HMRC will be removed.
- The requirements for joint ventures to gain gross payment status will be relaxed where one member already has this status and that firm or company has a right to at least 50% of the assets/income/shares/voting power in the joint venture.
- Earlier repayments can be made to liquidators in insolvency proceedings.
From 6 April 2016 further changes are proposed:
- Mandatory online filing of CIS returns will be introduced with the offer of alternative filing arrangements for those unable to access an online channel by reason of age, disability, remote location or religious objection.
- The directors’ self assessment filing requirements will be removed from the initial and annual compliance tests.
- The threshold for the turnover test will be reduced to £100,000 in multiple directorship situations.
From 6 April 2017 mandatory online verification of subcontractors will be introduced.