Introduction

In April 2003, Gordon Brown announced changes to the Construction Industry Scheme (CIS). The changes were originally due to take effect in April 2005 but were deferred initially to April 2006 and, at the eleventh hour, to April 2007. The last minute deferral, whilst welcome, is merely a reprieve and there is no doubt that the Revenue will continue in the meantime to clamp down on what they see as widespread abuse within the industry.

Under the new scheme the Revenue will be placing great emphasis on automatic penalties for late returns, failure to provide records or payslips etc but also a monthly emphasis on the employed/self-employed position of the subcontractors. If contractors get this wrong, once again penalties may apply.

This bulletin focuses on the main areas requiring consideration over the coming months. There are some fundamental issues which need to be considered prior to April 2007.