Industry delight as CIS delayed by a year

The construction industry has this week expressed its delight that Her Majesty’s Revenue and Customs (HMRC) has postponed the proposed new Construction Industry Scheme (CIS) by a year to April 2007.

The Joint Taxation Committee (JTC) resigned from talks with the HMRC two months ago to protest at its insistence on bringing in CIS in April 2006.

However, following the surprising change of heart, the industry has now agreed to strengthen co-operation with HMRC by agreeing to plan a full joint testing programme for the new verification services and monthly contractors’ returns, promoting the use of the new employment status declaration and analysing areas of non-compliance in the industry.

During this period, HMRC will also co-operate by stepping up its level of advice and compliance activity with the industry, including new interactive online software and up to 70 telephone advisers to provide help with employment status from next month.

The Federation of Master Builder’s director general Ian Davis said he was pleased that the government has listened to the concerns of the construction industry, as well as the IT and accountancy sectors.

“Had the new CIS started in April 2006, the result would have been chaos and potentially the closure of many businesses with the loss of large number of jobs,” he said.

“We regret that it has been necessary for the major part of the construction industry to walk out of negotiations with HMRC in order for our views to be heard. However, we now look forward to ensuring that the new CIS scheme, when implemented, meets the needs of both the construction industry and the government.”

Stephen Ratcliffe, chief executive of the Construction Confederation, added: “We’re delighted the HMRC has seen sense. There now has to be a complete timetable drawn up between now and April 2007. People can’t sit on their laurels.”