Announcements made in the Budget today spell the end for the government’s construction industry scheme, which was introduced in 1999 and designed to force self-employed construction workers to become employees whose income would be taxed at the source.
But Ernst & Young tax director Alastair Kendrick accused the Inland Revenue of ignoring industry criticism in 1999 at the time of the scheme’s launched but and added that he hoped that ‘this time the Inland Revenue will listen’.
The 1999 tax changes came under fire for imposing an additional administrative burden on employers in the construction industry. The changes were introduced following a government drive in 1997 to stop tax avoidance by foreign workers, who often left the country after finishing a job.
‘A lot of [building] people should be employed, but this is typically a self-employed industry. The 1997 drive was to take on a payroll system. The Budget now said that was not effective,’ Kendrick said.
Under the new building tax proposals registration cards and cross payment certificates will be replaced with a verification service. The government also wants to introduce an employment status declaration.
Under the plans vouchers will be replaced with periodic returns and the scheme would be further boosted by implementation of a new Inland Revenue computer system to trace non-compliant businesses online.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
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