Delay not cancellation

Just as business was starting to gear up for the introduction of the new Construction Industry Scheme (CIS) due to start in April 2006, having already been deferred from April 2005, the government announced that the new scheme was to be delayed again until April 2007. The real problem was that the Revenue’s systems were nowhere near ready to cope with a launch this April.

Part of the (largely unreported) background to this was the considerable pressure brought to bear on the Revenue by the construction industry who indeed announced as long ago as last September that they had withdrawn from negotiations with the Revenue because of the Revenue’s refusal to delay the start date.

As we now know, the current scheme will continue until April 2007 and over the next year there will be a full joint testing programme for the new verification service and monthly contractors’ returns and an analysis of areas of non-compliance in the industry.

In the run up to April 2007, the Revenue will step up their compliance activity in the construction industry. The message seems to be that there will be no light touch from April 2007, as business is being given an extra year to put its house in order. Contractors should certainly not be lulled into a false sense of security by the delay.

Please contact us if you would like to discuss any aspect of the current or new CIS.