Tackling Construction Industry Scheme (CIS) abuse
Executive summary
AAT supports the proposed approach to CIS set-offs and the application of interest and penalties.
AAT believes that a 14-day notice period for an employer to obtain and supply evidence of CIS deductions suffered is reasonable. This reflects the need for real time updates, that such information is likely to be readily available, that safeguards are provided and an additional 14-day period will follow in which the employer will have to make the correction, effectively meaning they have 28 days to address the issue before HMRC will make the correction to the EPS return.
We cautiously support the HMRC proposal for a site registration scheme. Providing the administrative burden, financial costs and bureaucracy do not outweigh the potential benefits of such a scheme, we would support measures that could help the site operator, workers and HMRC – and ultimately the taxpayer.
The ultimate objective of these changes is laudable, necessary and wholeheartedly backed by AAT, but success must not be achieved at the expense of law abiding small and micro-businesses. AAT urges HMRC to review the impact of any changes both broadly to ensure overall objectives are being met but also specifically to examine the impact on the small business community and law abiding businesses. AAT suggests that such a review must not be at some distant stage in the future but relatively quickly after changes come into force, and that more than one review is probably necessary, perhaps at a 6, 12 and 18 month stage.
Related consultation responses
Construction Industry Scheme reform
While there was some support from AAT members for elements of the proposed reform, there was more concern over whether the benefit justified the disruption.
Increasing the scope and powers of the Small Business Commissioner
We agree that the complaints handling function should be expanded, and support proposals that the Commissioner have powers to impose financial penalties.
