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Demolition men knock tax office
00:00 28 Jul 1999
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Demolition firms have accused the Inland Revenue of treating them
as "second-class citizens" over the terms required to get a CIS 6
tax certificate under the new Construction Industry Scheme.
The National Federation of Demolition Contractors has attacked the IR criteria that only firms with an annual turnover of £5 million are eligible for the top certificate. NFDC claimed that the average turnover of its 170 members is between £1.5 and £2 million.
Howard Button, NFDC past president and managing director of Button Demolition, said: "Members feel that it makes us appear as a lower level of contractor. It gives the impression to our clients that we are purely a subcontractor rather than a bona-fide company. If a firm is building two or three houses a year it is easy to reach that figure because you are buying a lot of materials, but because we salvage materials and cut our costs as much as we can, it is very difficult to meet £5 million. We feel that demolition firms should get a reduced threshold, or be made a special case."
Sidney Hunt, NFDC past president and Southern Demolition managing director, said: "The IR has said it consulted with the industry but it was only with the big boys turning over hundreds of millions of pounds. Approximately 70 per cent of our members do not do over £1 million, while some only achieve £500,000 a year."
Hunt believed the tax arrangements should be left alone. "Since the Finance Act 1974 we have had a 714, the top certificate you could have. We have never cheated and always pay on time. Why change something that isn't broken?
"Now I can't have a top certificate and I am treated as a second-class citizen. I am worried that I will lose out on tenders because I am not seen as a big enough company," Hunt said.
An IR spokesperson responded: "Demolition firms do need a £5 million turnover for a CIS 5 or they must show that operating with a CIS 6 would cause substantial difficulties. The non-personalised CIS 5 is easier to use as it does not have to be personally presented to the contractor. But whether they have a CIS 5 or CIS 6 they can still get paid without any tax deducted."
The National Federation of Demolition Contractors has attacked the IR criteria that only firms with an annual turnover of £5 million are eligible for the top certificate. NFDC claimed that the average turnover of its 170 members is between £1.5 and £2 million.
Howard Button, NFDC past president and managing director of Button Demolition, said: "Members feel that it makes us appear as a lower level of contractor. It gives the impression to our clients that we are purely a subcontractor rather than a bona-fide company. If a firm is building two or three houses a year it is easy to reach that figure because you are buying a lot of materials, but because we salvage materials and cut our costs as much as we can, it is very difficult to meet £5 million. We feel that demolition firms should get a reduced threshold, or be made a special case."
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Sidney Hunt, NFDC past president and Southern Demolition managing director, said: "The IR has said it consulted with the industry but it was only with the big boys turning over hundreds of millions of pounds. Approximately 70 per cent of our members do not do over £1 million, while some only achieve £500,000 a year."
Hunt believed the tax arrangements should be left alone. "Since the Finance Act 1974 we have had a 714, the top certificate you could have. We have never cheated and always pay on time. Why change something that isn't broken?
"Now I can't have a top certificate and I am treated as a second-class citizen. I am worried that I will lose out on tenders because I am not seen as a big enough company," Hunt said.
An IR spokesperson responded: "Demolition firms do need a £5 million turnover for a CIS 5 or they must show that operating with a CIS 6 would cause substantial difficulties. The non-personalised CIS 5 is easier to use as it does not have to be personally presented to the contractor. But whether they have a CIS 5 or CIS 6 they can still get paid without any tax deducted."
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