A high proportion of the vouchers which are supposed to be passed from payee to payer turn up incorrectly completed and frequently don’t turn out at all. A correctly completed CIS24, arriving within the legislative deadline is a hen’s tooth, indeed. Even the Revenue estimate the compliance cost at #7.40 a voucher!
Nick Raynsford, the minister responsible for construction, is said to have persuaded Dawn Primarolo to make some simplifications – but what will they be? The industry clearly needs more CIS5s (opposed to CIS6s) in circulation. These are the certificates that can be evidence by post, where payment vouchering is easy and cheap(er). If these are the certificates that can be evidence by post, where payment vouchering is easy and cheap(er).
If these could be issued to all businesses – not just companies – trading with a turnover of above #1m, the Revenue would have turned off much of the heat from beneath the burning cauldron.
The Revenue must come clean about a taxpayer’s right to appeal against the Revenue’s refusal of a CIS5. They have always denied that a firm issued with a CIS6 can appeal against the refusal of CIS5 – but this is unlikely to legally justifiable.
The legislation provides an appeal against refusal of an application.
Since those applying for CIS certificates use a form, which is amendable to an application for a CIS5 or CIS6, it seems likely that there is a right to appeal.
Now the Human Rights Act 1998 is in effect, it is unwise, if not foolhardy, of the Revenue to continue to concede appeals. Article 6 of the Act provides for reference to an independent tribunal from any decision made by the state or governing body.
Once firms refused a CIS5 – whose respectability is already established by the issue of CIS6 – can get their case heard by General Commissioners, there is likely to be a further wave of CIS5s granted.
I believe Commissioners would grant CIS5s to the directors of established firms who can demonstrate they are not ‘absentee landlords’ but that success of their business demands they are physically present to man phones, price tenders, complete orders, review health and safety procedures, organise transport and workers – do all the shouting and buttering up necessary to keep a construction firm on the road.
And finally, what construction clearly needs is a new CIS Scheme – one that can be done by e-mail – one without paper and plastic for all a minority of transactions. Let CIS be a lesson to everyone. It’s a nightmare.
– Liz Bridge is tax director of the Construction Confederation
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