CIS: An Update

Jul 25, 2014


By Lyndsey Hall

After an initial 27 year period of content, the Construction Industry Scheme has seen several changes over the last 15 years. Now, HMRC is looking to make another update to the scheme; this time loosening the reigns rather than tightening them.

HMRC have proposed a series of changes, some of which are fundamental. Here is a summary:

  • Softening of compliance test for gross payment status
  • Mandatory online filing (possibly via RTI)
  • Ability to amend CIS returns online
  • No more nil CIS returns
  • Mandatory online verification
  • Improved verification process
  • Up to date online CIS account accessible to subcontractors


The aim of the proposed changes is to make the scheme more efficient without negatively affecting its integrity; reducing costs for both HMRC and the contractors by improving the online filing and verification systems; and making the whole process simpler to administer. Another proposed change involves reducing the turnover test threshold of £200,000 for gross payment applications where there are multiple directors or partners; hopefully, therefore, encouraging more applications. HMRC claim that 50,000 subcontractors already meet the turnover test but have not applied for gross payment.

HMRC are even considering launching a mobile app in line with the new, simplified online system, enabling easier verification of subcontractors on site.

The biggest change HMRC are proposing is ditching the existing requirement to comply with all tax obligations, and making sure that CIS returns and payments, and SA/CT are in on time; which will be a welcome change to many contractors who have had to fight for their gross payment status.

The timetable for the proposed changes has not yet been confirmed, but mandatory online filing has an earliest suggested date of October 2016. Comments are invited on the proposals until 22nd September 2014.

What are your thoughts on the latest CIS proposals? How would the suggested changes affect your business? Let us know in the Comments.

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