Tax Disputes & Investigations

Construction Industry Scheme (CIS)

The new Construction Industry Scheme (CIS) began in April 2007 and replaced the previous 'card and vouchers' system. HM Revenue & Customs (HMRC) monitors the CIS very closely and has a number of specialist teams across the UK solely dedicated to ensuring that the scheme is being properly operated.

The main features of the CIS are -:

• All businesses operating in the construction industry are affected;
• Non-construction businesses spending an average of £1m or more per annum on construction are also part of the scheme;
• Subcontractors may be entitled to receive their payments either gross, net of a standard tax deduction of 20% or net of a special rate of 30%;
• Businesses are obliged to verify all new subcontractors with HMRC to establish the correct tax treatment before any payments can be made;
• Monthly CIS Returns must be made to HMRC detailing all payments made to subcontractors and any tax deducted;
• Penalties are levied for late or incorrect monthly returns;
• The monthly CIS Return includes an Employment Status declaration, which must be signed by a representative of the business; and
• Any business that is entitled to receive payments gross can have this status removed at any time if they fail the Tax Treatment Qualifying Test.

Tax Treatment Qualifying Test

The ability for a business to be paid gross (i.e. without the deduction of tax) is a major advantage and is regarded by the construction industry as a mark of respectability and credibility. Many major businesses and organisations (such as Local Authorities) will not deal with businesses that do not have gross payment status.

To attain and retain gross payment status, a business and its partners or Directors must remain completely up to date with all tax obligations, including the prompt filing of returns and payment of taxes/duties. This includes monthly payments of PAYE, NICs and CIS deductions. If one payment is more than fourteen days late or three payments are between one and fourteen days late, this could lead to gross payment status being withdrawn.

OneE TDI has a proven track record in helping businesses resist and overturn attempts by HMRC to remove gross payment status, including cases won before the Tax Tribunal. Whilst HMRC will always claim that cash-flow difficulties are not a 'reasonable excuse' for late payment, the Tribunal does not always agree. Proper presentation and argument of the facts is key to success.

How can OneE TDI help?

At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations work. We offer confidential, non-judgemental advice to best defend our clients and have a proven track record in successfully managing all contentious tax matters. We have successfully defended numerous businesses challenged by HMRC under CIS and ensured that any enquiry or dispute with HMRC was resolved quickly, fairly and with little disruption to the business itself. We provide a comprehensive service to accountancy and legal practitioners and their clients. Our advice saves our clients time and money and helps reduce their potential exposure to tax, interest and penalties.

Putting it simply, we take control of and manage all issues relating to CIS so you can get on with your life and your business. What price peace of mind?

Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.

How can I contact OneE TDI?

If you would like a free, no obligation discussion with us, please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.

Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.

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