CIS changes

HMRC announced they were making some minor changes to the CIS scheme from 6 April 2024, in that VAT failures are now counted when looking at whether a firm qualifies for gross payment status.

In line with other taxes, minor failures will not count towards gross payment disqualification. “Minor failures” are:

• 3 late submissions of up to 28 days for VAT returns
• a late payment of less than £100 in VAT
• 3 late payments of up to 14 days of VAT liability (of £100 or more)

The same appeal rights and reasonable excuse provisions apply to VAT failures as to other taxes.

Other changes that were introduced at the same time:

• HMRC is bringing forward the first review of compliance from 12 months after application to 6 months.
• Gross payment status can be immediately removed in cases of fraud.
• Most landlord/tenant construction payments are now outside of CIS.
• Subcontractor registration will eventually be moved wholly online, except for the digitally excluded.

Finally, HMRC announced a significant change with regards to limited company contractors obtaining a CIS refund, and it is now no longer possible to apply for the refund by phone.

Contractors will now need to apply online here or, if you are unable to claim online, by post