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Treasury climbs down over new CIS tax scheme


BENJAMIN Franklin said the only two certainties in life were death and taxes. But if it was not for a climb-down in October from HM Revenue & Customs, even taxes would have been thrown into chaos and confusion next April as the industry prepared for a payment meltdown under the Revenue's new CIS tax scheme.

Forced along by Gordon Brown eagerly eyeing extra monies from construction, tax officials are cracking down on employment status and originally wanted firms to fill in monthly returns for CIS payments from next April.

But ? rather unhelpfully ? the Revenue did not actually produce any software to help companies cope with this complete overhaul.

Add into the mix the taxman's history of botched IT schemes and still-fresh memories of the chaos ensuing from the 1999 introduction of the original CIS scheme and you can see why the sector has spent much of 2005 locked in desperate talks.

Industry representatives led by Construction Confederation tax director Liz Bridge shook their heads in disbelief as the Revenue ignored warnings about unreadiness, insisting on the April 2006 deadline. Patience finally snapped in September as the industry's joint taxation committee stormed out of talks.

But after a Construction News campaign, Treasury minister John Healy edged the industry back from the precipice and agreed to delay the introduction of the new scheme for another year.