Launch of the new Construction Industry Scheme

30th May 2007

One has to ask whether it was a wise choice to launch the new Construction Industry Scheme (CIS) on Good Friday! The industry has been waiting for the revamped scheme to be launched after problems have repeatedly delayed the launch date.

When the scheme was finally rolled out on the first working day after Good Friday, contractors found that they were not able to use the new online software to validate the status of their sub-contractors because it had effectively crashed.

The reason? Air conditioning problems! Quite ironic as a boost in air conditioning units will inevitably be required to cool soaring tempers of the frustrated users! Users will be glad to know that HM Revenue & Customs have wisely introduced a six month grace period during which they will waive any mistakes. Note however that after that, fines will be incurred for failure to comply.

A quick summary however for those who are not up to date with the new legislation:

? The new CIS scheme means that there will no longer be any cards, certificates or vouchers.

? Sub-contractor?s status is to be verified using the Revenue?s online system.

? Contractors have always had responsibility to correctly determine employment status of sub-contractors. From April 2007 contractors also now need to sign a declaration that this has been done.

? Contractors must now complete a monthly return to the Revenue as opposed to the previously required annual return

? Sub-contractors who commenced self employed work after commencement of the new CIS must register for the new CIS. Subcontractors registered under the old system need not re-register

For those unsure about anything in connection with the revised Construction Industry Scheme and the measures required for compliance, there are some useful reference sources. Note however, that HMRC?s main website, <!-- SPCode auto-link start --><a href="http://www.hmrc.gov.uk/cis" target="_blank">http://www.hmrc.gov.uk/cis</a><!-- SPCode auto-link end -->, has yet to be updated - its ?What?s New? section was last updated in October 2005. The website to review is found at <!-- SPCode auto-link start --><a href="http://www.new-cis.com." target="_blank">http://www.new-cis.com.</a><!-- SPCode auto-link end -->

Another useful guidance note can be found through the following link, <!-- SPCode auto-link start --><a href="http://www.hmrc.gov.uk/new-cis/update-march07.pdf" target="_blank">http://www.hmrc.gov.uk/new-cis/update-march07.pdf</a><!-- SPCode auto-link end --> .

Author: Bryan Hoare