New CIS (Construction Industry Scheme)

News - Gross Payment Test

Sub-contractors who currently receive payments from Contractors gross should be aware that HMRC has just completed the first sample run of the "rolling annual review" to identify whether your compliance record will enable you to retain your gross payment status. The consequences of sub-contractors losing gross payment status are summarized in the attached. (36KB pdf)

Important press release from HMRC re CIS

HM Revenue & Customs have issued this press release (44KB pdf) to inform contractors that they will start charging penalties for all CIS returns not received by the due date, namely the 19th of every month.

New CIS Launched

The New CIS launched on 6 April and is now operational. ECA members are reminded that NOW: -

• The new rates for payment under deduction apply, i.e. 20% for sub-contractors registered with HMRC for payment under deduction (Standard Rate of Deduction).  The rate is 30% for sub-contractors who are not registered with HMRC (Higher Rate of Deduction).
• New sub-contractors not appearing on the list provided by HMRC to contractors in March must be verified to establish their payment status i.e. gross / under standard rate of deduction / under higher rate of deduction.
• CIS cards and certificates are now obsolete!
• Contractors must issue sub-contractors, paid under deduction, with a Statement of Deduction’ (see Members Circular 81 of 2006 or CIS 340, Appendix E, for a draft. 
• CIS Vouchers are now obsolete! Contractors will receive a 'Contractors monthly return' from HMRC. First return to be submitted by 19 May 2007.

For more information -

• CIS Helpline 0845 366 7899
• HMRC websites - http://www.hmrc.gov.uk/new-cis/index.htm
• Guide for Contractors & Sub-Contractors  -  CIS 340
• Fact sheets CIS 341 - CIS 349

New CIS - Top Ten Tips

Attached is an information sheet (49KB pdf) giving our Top Ten Tips to help contractors with the transition to the new CIS scheme.

New ECA brochure - Countdown to New CIS, April 2007

The ECA has published a brochure entitled New Construction Industry Scheme - Countdown April 2007 (135KB pdf) to help and advise members on the steps they should be taking, month by month, to prepare for the introduction of the new CIS in April 2007.

Archived documents from this webpage

Articles about CIS written by Ken Tracey for 'Electrical & Mechanical Contractor' magazine The New Scheme on the Block  (54KB pdf) (June 2006) Keeping Compliant (56KB pdf) (July/August 2006) Status Symbols (67KB pdf) (September 2006)

Tony Blair's comments (32KB pdf) on bogus self employment (September 2006) Director's correspondence (52KB pdf) with the Treasury re ECA members failing the Compliance Test.  (April 2006) Refusal to renew gross payment certificates (34KB pdf) (May and July 2005) Inland Revenue's Leverage Exercise in 2004 (53KB pdf) (August 2004) Correspondence from ECA Director to Paymaster General re CIS draft legislation  (34KB pdf) (March 2004) Chancellor's pre-budget report in November 2002 mentions reform of the CIS (34KB pdf) and "Working Together for a new Scheme".  (November 2003)