Construction Industry Scheme – 2021 changes
PSTAX is delighted to announce that it will be holding two Construction Industry Scheme (‘CIS’) Seminars via Microsoft Teams to help public bodies comply with the significant CIS changes that took effect from April 2021.
The dates of the seminars are Thursday 27 May 2021 and Thursday 10 June 2021.
Reserve your place at either Seminar by emailing firstname.lastname@example.org.
Following a period of consultation last year, during which five potential changes were considered regarding the CIS rules, four of these were taken forward and will be subject to rule changes. Three of these will apply in accordance with the original consultation, as follows:
- CIS deductions claimed against PAYE
- Deductions for materials
- Expanding the scope of the false registration penalty
However, the most significant development is the change to the threshold that applies in respect of the definition of a ‘deemed contractor’, which will now be based on a rolling aggregate total of £3m over a 12-month period rather than an average of £1m over the past three complete financial years.
Since the changes were announced, we have been in lengthy consultation with HMRC regarding whether this means that those bodies which fall below the new threshold can now deregister from CIS. However, there was some doubt about this with ambiguous statements from HMRC and the fact that some bodies falling below the threshold were told by the CIS helpline that they could not deregister if they had any further CIS expenditure planned.
However, HMRC has recently confirmed that those affected will be able to deregister where the deemed contractor’s CIS expenditure falls below the £3m threshold, and they will not have any further expenditure that would take them above that limit.
With this in mind, a key focus of the Seminar will be to provide guidance on how those affected should go about taking the practical steps to achieve this and the support PSTAX can provide in this area.
Additionally, all public bodies are reminded that, notwithstanding the changes to the threshold, it is important to note that all deemed contractors will be required to monitor their CIS expenditure regardless of whether this is above or below the threshold. Therefore, an understanding of the construction operations that are inside CIS is vital to ensure ongoing compliance, and this will also be covered in the Seminar.
Because of these significant developments, we are pleased to offer two more seminars to consider the steps that public bodies should have taken to ensure they are compliant.
The Seminar will include sessions covering the following:
- The April 2021 legislative changes, including the new rules on deductions for materials claimed by clients’ subcontractors
- How the 12-month rolling period will work and how to monitor CIS expenditure
- The impact of the new rules on schools, charities and housing companies wholly owned by local authorities (including ALMOs)
- The rules regarding the election process to deregister and a discussion of different scenarios where clients may elect to remain in CIS even when de-registration is possible technically, but for practical reasons they choose not to deregister, eg where it is known that there will be significant construction expenditure in the near future
- An overview on ‘construction operations’ and the activities that are within scope of CIS and those that are not, including what happens if there is a ‘mixed contract’ covering works that are both inside and outside the scope of CIS
- The advantages and disadvantages of de-registration election including the overlap with the VAT Domestic Reverse Charge rules that came into effect from 1 March 2021. If a client is not required to operate CIS because it is below the deemed contractor threshold, it will not have to operate the DRC rules
Given the relevance of the new CIS changes and the financial consequences of not complying, we strongly recommend that our clients and contacts attend this event to help understand the latest information available. Additionally, we recommend early booking to guarantee your delegate place(s) given the anticipated demand.
The on-line Seminars are to be held on Thursday 27 May 2021 and Thursday 10 June 2021 and will start promptly at 10.00am. We aim to finish the seminars at 1.00pm.
The cost of a seminar place is £180 plus VAT per delegate. Organisations booking three or more places at the seminar will receive a 10% discount.
You can book by sending an email to email@example.com.
When making a booking, please provide a PO number. If you book and subsequently find that you cannot attend, please email firstname.lastname@example.org