ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

CIS update

  • LinkedIn (opens new window)
  • Twitter (opens new window)
Justine Riccomini By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

2 December 2020

Main points:

  • HMRC has produced its summary of responses and draft legislation following the latest CIS consultation
  • Four important changes are being made to the existing legislation
  • Members should be aware of these and advise clients accordingly

Justine Riccomini discusses the outcome of the latest CIS consultation.

Building resistance

Back in early Spring 2020, HMRC issued a consultation entitled “Tackling Construction Industry Scheme Abuse”. The original deadline for responses was 28 May, but coronavirus measures led to the deadline being extended to 28 August 2020 instead. HMRC received 34 written responses and held 4 separate round table meetings to consult with stakeholders and tax experts about the proposed measures.

HMRC published the summary of the responses on 12 November 2020 and some of the main issues within those responses were discussed at the newly re-formed Construction Forum, which is a re-convened meeting hosted by HMRC and co-chaired by ICAS aimed at discussing all aspects of taxation affecting the construction sector.

Key to the consultation is that HMRC has stated it is going to utilise the responses submitted to assist in and inform the formulation of legislation and guidance.

The changes

There are four main changes which are to be made to the current iteration of the secondary CIS legislation (the original version of which can be found at SI 2005/2045) The Income Tax (Construction Industry Scheme) Regulations 2005 (the primary legislation is found within FA04/S57-S77and FA04/SCH11& 12):

1. HMRC will gain the power to amend the CIS deductions claimed by sub-contractors on their Real Time Information (RTI) returns. The power will be used in various new ways – to correct errors and omissions, remove claims, prevent claims and amend in-year deductions where insufficient evidence exists or where the employer does not act as directed by HMRC. All HMRC actions will be capable of review and appeal by the relevant subcontractors.

2. The cost of materials will specifically only be allowable (and therefore not subject to CIS withholding deductions) where the subcontractor can show that they have directly incurred that cost. The legislation will clarify that only a subcontractor’s directly incurred costs for materials can be deducted from gross payments by the contractor, before applying the CIS deductions at the appropriate rate.

3. The “deemed contractor” legislation will be amended in such a way that the level of spend on “Construction Operations” is monitored more regularly – currently business are only required to look back at the end of the year to see if they have breached the £3m threshold (£1m in each of the last 3 years). Going forward, business will have to maintain a watching brief on a month by month basis and start operating CIS as deemed contractors where in any 12 month period they have exceeded the £3 m threshold.

4. Penalties for provision of false information when applying for either gross payment status (GPS) or payment under deduction within the CIS are being widened in scope to include situations whereby individuals and companies who are in a position to exercise influence or control over the applicant encourage that person to make a false statement or they themselves render a false statement. Additionally, penalties will arise where they supply a false document to an applicant in support of their application or if they themselves supply a false document to HMRC for the purpose of enabling another person to register for GPS or payment under deduction.

Further reading

The legislation will take effect from 6 April 2021 and will affect around a quarter of a million construction businesses who are registered with the scheme. Treasury estimates suggest the changes will result in additional revenues of £20m in 2022/23 and 2023/24, and £15m in 2024/25.

Do you have any representations on this legislation or HMRC policy that you want ICAS to make on your behalf? Contact the Tax team on tax@icas.com.

Income Tax, NICs and workers

By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

1 September 2020

Tailor made - employment tax fundamental principles hit the headlines again

By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

31 August 2020

2022-11-mitigo 2022-11-mitigo
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: