Important changes to the CIS

Important changes will be made to the Construction Industry Scheme (CIS) from April 2007

What are the new changes?

 

In summary the changes are:

 

1. Contractors must ensure the correct employment status is applied to their workers.
    
   
2. New rules about paying subcontractors under deduction or gross have been introduced:
    
   1. CIS cards, certificates and vouchers will no longer be used or required.
      
      
   2. All new subcontractors will need to register with HMRC. If a subcontractor is not registered, payments can be made but contractors will need to apply higher rate of deduction.
      
      
3. Contractors will be required to make a monthly return to the HMC showing payments made to all subcontractors and declaring that none are employees.
   Even if no payments are made to subcontractors in a month, returns will still be required under the new scheme.
   Annual returns will cease.
    
   
4. Contractors must provide subcontractors paid under deduction with pay statements.

 

For further information on the new rules and how they may affect you please contact HMRC on 0845 300 0581 or download the latest guide:

 

http://www.hmrc.gov.uk/new-cis/cis340.pdf

 

Will IRIS PAYE-Master incorporate these changes?

IRIS PAYE-Master is designed for PAYE payroll schemes only.
There is some limited functionality in IRIS PAYE-Master which will allow users to cater for CIS Payments and Deductions, these are:
Using tax code D4 for the 18% tax deduction and National Insurance letter X for no National Insurance deductions.
 

There are currently no plans to add any further functionality to the CIS area of the system. We have however noted comments from customers about the requirement for this feature to be enhanced and will be considering it for future releases.