Kevin Read outlines the changes to the CIS rules in Finance Act 2024 and also looks at a recent tribunal case.
Under the construction industry scheme (CIS), contractors and deemed contractors must withhold deductions from payments made to subcontractors who do not hold gross payment status (GPS), at either:
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20% (the standard rate); or
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30% (if the recipient is not registered for CIS or cannot be verified).
To obtain GPS and therefore receive payments without any deductions, subcontractors must meet certain requirements. One of these requirements (the compliance test) includes that all CIS and direct tax returns and payments (excluding certain income tax and corporation tax self-assessment payments) must be:
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Correct; and
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submitted by the applicable deadlines.
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