Mike Herdman and Edmund Paul (Grant Thornton) examine the draft provisions and their implications for affected business.
Under the CIS rules subcontractors who are not registered with HMRC are subject to withholding of 30% those who are registered with HMRC but not eligible for gross payment status are subject to withholding at 20% (FA 2004 s 61). Contractors are required to verify the payment status of their sub-contractors with HMRC which will advise the contractor on the appropriate percentage deduction.
As part of the VAT reverse charge consultation it was suggested that the CIS rules could be strengthened. In March 2020 the government consulted on legislative changes as part of its consultation on tackling abuse within the construction industry. The resulting draft legislation for inclusion in Finance Bill 2021 was then published last November.
This article examines the draft provisions and their implications...
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Mike Herdman and Edmund Paul (Grant Thornton) examine the draft provisions and their implications for affected business.
Under the CIS rules subcontractors who are not registered with HMRC are subject to withholding of 30% those who are registered with HMRC but not eligible for gross payment status are subject to withholding at 20% (FA 2004 s 61). Contractors are required to verify the payment status of their sub-contractors with HMRC which will advise the contractor on the appropriate percentage deduction.
As part of the VAT reverse charge consultation it was suggested that the CIS rules could be strengthened. In March 2020 the government consulted on legislative changes as part of its consultation on tackling abuse within the construction industry. The resulting draft legislation for inclusion in Finance Bill 2021 was then published last November.
This article examines the draft provisions and their implications...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
