November 2008

Construction Industry Tax Scheme (CIS)

A large number of contractors and sub contractors the CIS will have taken advantage of the opportunity to receive payments gross without deduction of tax, the so called Gross Payment Status (GPS).

What they may not be aware of, reports Ian Hales, a Senior Tax Manager at Bradford Accountants Auker Rhodes, is that they may all too easily lose that status without realising that they have contravened any rules.

The Revenue has an automated review procedure attached to its computer. Called TTQT this compliance test reviews returns and payments made by the taxpayer and, when certain tests are failed, automatically rescinds the Gross Payment Status.

The following failures would result in such a notification being issued –

• Four or more late submissions of a monthly CIS300 return.
• Four or more late payments of CIS / PAYE deductions.
• Any CIS 300 submitted more than 28 days after the due date.
• Any payment of CIS / PAYE deductions made more than 14 days after the due date.
• Two or more payments of Self Assessment tax paid after the due date.
• Any Self Assessment return due in the qualifying period but outstanding at the date of application.
• Any non Self Assessment payment not paid by the due date.
• Any payment of Corporation Tax made more than 28 days after the due date.

This list is not exhaustive. In addition it should be noted that there are Non CIS triggers in the above list. For example it only needs the consecutive 31 July and 31 January Self Assessment Payments on Account to each be made one day late and the automatic failure will be triggered, resulting in loss of GPS.

It is therefore now more than ever essential that contractors and sub contractors comply with the du dates for submission of all returns and payments or face serious, business threatening consequences.

For more information contact Ian Hales on 01274 548000 or your usual Auker Rhodes contact.

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