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HMRC Proposed Changes To Tackle CIS Abuse

Correcting errors and omissions ...


Posted by Helen Beaumont on 09/12/2020 @ 8:00AM

A new policy paper has been published by HMRC, covering a range of amendments to the Construction Industry Scheme (CIS), taking effect from the 6th April 2021. These amendments grant new powers to HMRC ...

HMRC is ensuring everyone understands what is expected of them when using the CIS!

HMRC is ensuring everyone understands what is expected of them when using the CIS!

copyright: sorn340 / 123rf

They allow it to amend the CIS deduction amounts that sub-contractors claim on their Real Time Information (RTI) returns. This power will be used to correct errors and omissions. It will also allow HMRC to remove claims and even to prevent certain employers from submitting similar claims in future.

These changes also cover:

  • Cost of materials - From April 2021, only direct costs incurred by a sub-contractor are not subject to a CIS deduction

  • Deemed contractors - The rules are changing for determining which entities outside of the construction sector need to register for CIS as deemed contractors. Expenditure will need to be monitored regularly and CIS will apply when construction expenditure exceeds £3 million in the previous 12-months

  • CIS registration penalties - The scope for penalties will expand when supplying false information or making fraudulent deductions within the CIS. Both individuals and companies are now liable if they exercise influence or control over the person making the claim

These changes may seem like they could cause a lot of trouble for businesses operating under the CIS; however, HMRC is using them to formalise the rules and close-up some loopholes, ensuring everyone understands what is expected of them when using the Construction Industry Scheme.

Until next time ...



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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.