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Revenue grants composite CIS5 despite Gabem

HMRC awards rival Brookson gross payment certicate

ONE of the country's biggest composite companies has been given a CIS5 certificate just weeks after rival Gabem had its right to be paid gross of tax revoked by the Revenue.

Officials from HM Revenue & Customs granted CIS5 status to Warrington-based Brookson, which is expanding in the construction sector.

Managing director Martin Hesketh said: 'Receipt of the CIS certificates will enable the composite companies to make payments to contractors while remaining compliant with the requirements of CIS.

'We have over 17,000 members in sectors that include engineering and technical and had planned to enter the CIS construction market this autumn. We chose to bring forward its launch to address demand for a compliant service provider in light of recent developments.'

Brookson claims to have taken on 500 construction professionals in the two weeks since the service was launched.

Gabem had its CIS5 status revoked in June and had a High Court appeal against the decision turned down last month.

It will appeal again in October after having its CIS5 turned down on a technicality.

Gabem's clients are paid through single-person limited companies and the firm fell foul of the Revenue because not all of its 11,500 operatives held a CIS4 certificate.

Another firm operating a similar system of single-person firms to limit tax liabilities has also had its gross payment status withdrawn.

But composite operators are confident the move does not signal a blanket clampdown.

A Brookson spokesman said: 'HMRC has recognised there are a minority of businesses that work within the rules.

They are looking to ensure that those individuals working through limited companies are compliant with all tax and National Insurance legislation.

'There is poor compliance because there are a significant number of non-compliant providers. HMRC is looking to stop those businesses that are not following the rules.'

Construction News is hosting a CIS conference on October 26. For details see www.CISupdate. co. uk