Inland Revenue denies CIS clampdown

The denial comes after Ernst & Young issued a warning that the Revenue was about to target the construction industry to enforce the scheme.

Richard White, tax partner in E&Y’s real estate group, said: ‘We have recently seen clear evidence that the Revenue is gearing up to put the construction and property sectors under the microscope. They regard CIS as an important new means of preventing tax leakage.’

The scheme forced subcontractors to adopt a formal tax status. Contractors are not permitted to pay subcontractors unless they have seen evidence – a tax certificate or construction tax certificate – of their status.

A Revenue spokesman said no special measures were being planned but enforcement of the scheme would continue.

‘Any of our legislation has to be policed and the CIS is no different from anything else,’ she said.

The scheme, which is still under review by the Revenue, has proved extremely unpopular with the construction industry after it created powers to impose £3,000 fines on contractors who did not check the tax status of subcontractors.


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