The review of the Construction Industry Scheme was announced on 21st March 2000.
Terms of reference and broad areas of the Scheme to be considered were agreed on.
Joint Working Group
The Inland Revenue will be working together with The Department of the Environment, Transport and the Regions (DETR), and all sections of the Construction Industry.
Industry Representatives have been put forward by the Joint Taxation Council for the Construction Industry, The Construction Clients Forum, and The Construction Products Association.
Terms of Reference for the Group have been agreed and work has started to consider the representations made about the Scheme to the Paymaster General, Dawn Primarolo, by industry representatives and individuals.
Individual representations, which the group will take into account, can also be made in writing to:
Construction Industry Scheme Review
Or by e-mail to: philip.hogan.@ir.gsi.gov.uk
NOTES FOR EDITORS
A tax deduction scheme for the Construction Industry was introduced in 1971 to tackle the substantial tax leakage in the industry.
The new scheme that took effect from the 1st August was built largely on the principles of the old scheme. Changes to the Scheme were introduced in Schedule 27 Finance Act 1995 and Section 178 Finance Act 1996. Further minor changes were introduced in Schedule 8 of Finance Act 1998.
A package of measures to improve the new Construction Industry Scheme, was announced on 21st March and in which:
– The procedures for CIS24 vouchers were simplified.
– The turnover threshold, above which subcontracting companies need to make a formal business case to qualify for a CIS5 certificate, was reduced from #5 million to #3 million.
Subcontractors have also benefited from
– A reduction in the deduction rate from 23% to 18% from 6th April.
– The increase in the PAYE quarterly payments limit which will help the cash flow of many smaller subcontracting businesses.
www.inlandrevenue.gov.uk CONSTRUCTION INDUSTRY SCHEME – JOINT WORKING GROUP
TERMS OF REFERENCE
The Joint Working Group comprises officials from the Inland Revenue, the Department of the Environment, Transport and the Regions (DETR) and representatives of all parts of the Construction Industry.
The purpose of the Group is to provide a lead and direction for a review of the Scheme and make proposals for improved procedures.
The Group will consider ways in which the Scheme can be improved. In particular, ways in which the Inland Revenue can help those in the industry to:
– Reduce the costs to contractors and sub-contractors of administering the Scheme
– Provide more help and support to those in the industry to help them to understand and fulfil their obligations.
These aims will be balanced with the need to protect the flow of revenue to the Exchequer
Priorities will be to identify:
– Urgent improvements to the Scheme, that could be delivered quickly and without the need for legislation.
– Improvements that could be delivered in the medium term through secondary legislation.
– Longer-term changes and improvements which may require primary legislation.
– Changes that will be required to ensure that the Scheme is robust, adaptable and makes full use of technological advances including electronic communication.
In particular the group will look at the following immediate areas of concern:
– Vouchering issues and ways of simplifying procedures and reducing administration costs
– The amount of travelling associated with the presenting of CIS6 certificates and ways in which these could be addressed
– Ways in which the different criteria for granting a certificate to companies and to individuals and partnerships can be made more acceptable to the industry
– Introducing in-year repayments for companies
– Risks associated with CIS 5 certificates
– Ways of moving towards electronic delivery of information and exchange of vouchers.
The group will take into account:
– Prospective advances in information technology and will identify areas where appropriate links should be made with other Government initiatives for the Construction Industry.
– Information from the independent market research commissioned by the Inland Revenue, the results of the work being undertaken by the Inland Revenue Review Team and the User Panel
– How closer working between the Inland Revenue and Customs and Excise could be used to the industry’s advantage.
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