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| CIS payments: HMRC guidance published |
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HMRC have published some further guidance on tax deductions under the new Construction Industry Scheme (CIS), which commences on 6 April 2007. When the new scheme begins on 6 April 2007, the standard deduction rate will be 20%. (The rate is currently 18% under the existing scheme in force until 5 April). HMRC have been asked to give some guidance on how contractors should handle the change in the rate where they use a computerised accounting system and where an invoice processed on or before 5 April will not be paid until after that date. Where this is likely to happen, HMRC state that the following points should be observed:
Where a contractor’s accounting system has applied the old rate of 18% to all or part of a subcontractor’s payment made after 5 April because it was unable to pick up the new rate, the contractor should show the amount of payment and the actual deduction that was made on the monthly return for the month in which the payment was made. Where this has happened, HMRC will not usually regard such action as a compliance failure by the contractor. However, HMRC would not expect to see such under-deductions beyond the return for the month ended 5 June 2007, unless there were exceptional circumstances. Related news Links HMRC: New Construction Industry Scheme
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Tuesday, 13 March 2007 | 4408 Hits |
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