Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Longer CIS amnesty sought

Construction Confederation seeks extension to a year of penalty-free period from new tax regime

THE CONSTRUCTION Confederation is urging the Inland Revenue to spare contractors from penalty charges for incorrect returns for an extra six months when the new CIS tax scheme is introduced next April.

HM Revenue & Customs has already granted a six-month penalty-free period for 'innocent errors' when the scheme is introduced. But the confederation wants longer to help contractors come to terms with the new system.

In a Budget submission to the Treasury, Confederation chairman James Wates said: 'We are grateful for all the confidence-building and education exercises that are being undertaken in the lead-up to the start but are concerned that the first year will not be as easy as HMRC indicates.

'We think the six-month penalty-free regime for innocent error should be extended to one year.'

The charges are currently due to kick in from October 19 next year. Penalties for incorrect CIS filing can reach £3,000 for false declarations of employment status or verification, with £100 fines for late returns.

But late or incorrect payments made in the penalty-free period will still count towards a firm's compliance record, which will be considered by the Revenue in renewing CIS certificates.

The confederation also wants the penalty-free period extended to cover the period of compliance tests, which determine whether a contractor can be paid gross.

Mr Wates added: 'The natural confusion created when the scheme changes will only be manageable if the population of contractors paid gross remains fairly constant, and this is not by any means certain.'