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We would like to inform you of significant upcoming changes to the Construction Industry Scheme (CIS) that will take effect from 6 April2024. These changes aim to streamline processes and enhance compliance measures within the construction sector.

Key Updates:

  1. Gross Payment Status (GPS) Compliance Test Enhancements:
  • The GPS compliance test will now include VAT filing and payment obligations.
  • Only VAT compliance incidents from 6 April 2024 will impact existing GPS holders.
  • Minor VAT compliance failures will have specified allowances to prevent undue GPS status loss, with specific thresholds set for late submissions and payments.
  1. Accelerated Compliance Review Timelines:
  • The initial compliance review for GPS will occur 6 months post-application, returning to an annual review, thereafter, enhancing oversight and compliance.
  1. Extended Grounds for GPS Cancellation:
  • Immediate cancellation of GPS may occur if fraudulent activities are detected concerning VAT and other tax obligations, with rights to appeal maintained.
  1. CIS Scope Adjustment for Landlord to Tenant Payments:
  • From 6 April2024, most landlord to tenant construction payments will be excluded from the CIS, reducing administrative and financial burdens, and focusing on tenant-beneficial construction work.
  1. Digitalization of Subcontractor Processes:
  • Introduction of a new digital form for subcontractor registration and GPS applications, facilitating a more efficient and secure process. Note that telephone-based registrations and applications will be phased out, except for individuals with digital exclusions.

These updates signify HMRC’s commitment to improving the CIS framework, ensuring greater compliance and convenience for stakeholders in the construction industry. Please prepare accordingly to comply with these new requirements and benefit from the streamlined processes.

For further information or assistance, do not hesitate to contact us.