The CIPP’s formal response: Tackling Construction Industry Scheme abuse

14 September 2020

HMRC ran a consultation that looked at the ways in which abuse in the Construction Industry Scheme (CIS) could be prevented. The CIPP, after hosting a survey and running a virtual roundtable think tank meeting, submitted a formal response, which can be located online.

The consultation discussed a new power for HMRC to correct CIS deduction amounts claimed by sub-contractors on employer returns, detailed amendments to some of the CIS rules in order to confirm their meaning or expand their scope, and also looked at some preliminary ideas relating to construction supply chains and how they could potentially help to prevent tax loss. It was open from 19 March 2020 to 28 August 2020.

The key findings presented in the CIPP’s response were as follows:

  • The proposed timing of corrections to be made is not long enough, and 14 days was deemed to be too short to enable any amendments, or to gain evidence to back up what’s been submitted
  • The majority of people are in agreement with the evidence requirements
  • Members raised concerns over how non-compliance will be notified
  • Questions were put forward around how HMRC would determine that a claim was not legitimate – i.e. what would instigate an investigation?
  • Software providers should be consulted with about how non-compliance will be actioned and communicated
  • Further guidance on compliance should be issued
  • Survey results confirmed that subcontractors were happy with compliance checks already carried out, and that any further official testing would be detrimental

The response can be read in its entirety here.


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