It has been recently reported that HMRC are set to make even more changes to the construction industry and in turn the CIS scheme.
As you are all aware there has been many changes over the last few years that has affected this sector and in turn the CIS scheme.
In 2019, the construction industry will see the introduction of the VAT domestic reverse charge. In addition to this change, there is also further changes on the horizon.
From April 6th 2019, there will be the introduction of the Security deposit legislation.
The Security Deposit Legislation is something that has historically been implemented by HMRC but, so far has not been extended to include the construction industry until now.
The Security Deposit Legislation allows HMRC to require a deposit or bond that is to be paid by the tax payer where HMRC believes there may be a risk of non -compliance.
The new provisions will enable HMRC to require specified persons to make a security payment to HMRC for the amount of CIS deductions that the person is liable to pay.
Where a company is required to provide a security, the Regulations may allow HMRC to include the company’s directors and officers as liable persons.
HMRC will only be able to require a security payment where it considers it is ‘necessary for the protection of the revenue’.
According to the consultation document, securities will be ‘targeted specifically at high risk businesses that have historically failed to comply with their tax obligations, or where those behind the business are connected with previous business failure that resulted in loss of tax’, such as phoenix type cases.
For more information on this legislation and how it may potentially impact your business, call us on 0333 121 2001.
Published: October 25th 2018