Improving the operation of the Construction Industry Scheme

10 December 2015

At Autumn Statement 2014, the government announced it would implement improvements to the operation of the Construction Industry Scheme. In particular, the government proposed to enable more subcontractors to receive payments without deduction on account of tax by:

  • reducing the threshold for the turnover test from £200,000 to £100,000 where there are multiple partners or directors, from April 2016
  • simplifying the compliance test to focus on fewer compliance obligations from April 2016, enabling more sub-contractors to receive payments without deduction

and to:

  • introduce mandatory online filing from April 2016
  • mandate online verification, where the contractor checks the sub-contractor’s tax status with HM Revenue and Customs (HMRC) , from April 2017, following implementation of improvements to the service in 2016 to 2017.

There was broad support for these proposals which were part of the 2014 CIS consultation package.

HMRC has published draft regulations, together with a draft explanatory memorandum, for a period of technical consultation which will close on Friday 22 January 2016.