The CIOT’s response
to HMRC’s consultation Tackling
construction industry scheme abuse questions the scope of the
consultation which was limited to the implementation of the proposed new
provision which is designed to ensure CIS deductions claimed by employers are
correct. The CIOT would have liked to see questions on amending the definition
of ‘deemed contractor’, on restricting claims for deductions for materials, and
the change to the false registration penalty.
On the central deductions point, the CIOT notes that the
proposed approach seems a ‘somewhat muted response to what appears to be
characterised as a deliberate intent to misrepresent the amount of CIS
deductions that a sub-contractor has suffered’ – actions which ‘would seem to
be tantamount to fraud’. In essence, a ‘one size fits all’ approach is not the
right solution when overclaims can arise in a whole range of circumstances,
from genuine mistakes through to deliberate attempts to defraud, so the
measures are likely to be both too harsh for the genuine error yet not harsh
enough for the fraudster.
The CIOT’s response
to HMRC’s consultation Tackling
construction industry scheme abuse questions the scope of the
consultation which was limited to the implementation of the proposed new
provision which is designed to ensure CIS deductions claimed by employers are
correct. The CIOT would have liked to see questions on amending the definition
of ‘deemed contractor’, on restricting claims for deductions for materials, and
the change to the false registration penalty.
On the central deductions point, the CIOT notes that the
proposed approach seems a ‘somewhat muted response to what appears to be
characterised as a deliberate intent to misrepresent the amount of CIS
deductions that a sub-contractor has suffered’ – actions which ‘would seem to
be tantamount to fraud’. In essence, a ‘one size fits all’ approach is not the
right solution when overclaims can arise in a whole range of circumstances,
from genuine mistakes through to deliberate attempts to defraud, so the
measures are likely to be both too harsh for the genuine error yet not harsh
enough for the fraudster.
