Have you calculated just how much complying with new CIS has cost your company? Even if you have been lucky enough not to be in receipt of one of the 806,000 penalties issued by HMRC, chances are it has cost you time and investment in new software to cope with the scheme.
But just how much has it cost the construction industry in total? New figures calculated exclusively for Contract Journal put the total cost of the new CIS scheme at an astonishing £500m (see p8). And the individual figures are eyewatering, with contractors shelling out an estimated £310m over the past 15 months solely for administering the scheme. Add the £100m firms spent on the initial set-up, £70m on penalties, and £20m on the cost of appeals, and you are looking at one hugely expensive scheme, exclusively targeting construction.
So is
the news that the Tories are thinking about reworking CIS good or bad news? There is no way that any party in government will be willing to give up tax revenue - from whatever quarter - and it may be that companies have invested so much in the current scheme that they are reluctant to change. But given the current mess, if there is an opportunity to introduce a less complex, less labour-intensive option, it would certainly be worth considering.Lets just
hope it won't sting the industry for a further £500m, before any tax is paid.
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