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Construction Industry

Volume 404: debated on Tuesday 6 May 2003

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To ask the Chancellor of the Exchequer what assessment he has made of the impact on the Construction Industry Scheme of the introduction of the CIS 4/5/6 scheme in August 1999. [110911]

The introduction of the Construction Industry Scheme in August 1999 was successful in bringing in at least 75,000 previously unknown subcontractors and around £280 million additional Exchequer yield in 1999–2000. None the less complaints persist about the cumbersome processes and the costs to business of complying with the rules and requirements.As a direct consequence of these representations the Inland Revenue consulted on alternative proposals in November 2002 ("The Inland Revenue and the Construction Industry: Working together for a new scheme"). Following this consultation the Government announced in this year's Budget that a new scheme based on these proposals will be introduced from April 2005.

To ask the Chancellor of the Exchequer whether his Department plans to replace the Construction Industry Scheme's Registration Card (CIS4), Construction Tax Certificate (CIS5) or Subcontractor's Tax Certificate (CIS6) with a simplified and single certificate. [110916]

The Government announced in this year's Budget that the Construction Industry Tax Scheme will be replaced in April 2005 in order to reduce the regulatory burden on the Industry. The key features are:

To replace the Registration Cards (CIS4) and Gross Payment Certificates (CIS5 and CIS6) with an Inland Revenue verification service to tell contractors whether to pay net or gross of tax. This will mean that there will no longer be cards or certificates and therefore subcontractors will not have to spend time in travelling to present them.
To replace vouchers with periodic returns to the Revenue of payments to subcontractors thus reducing the amount of paperwork required by the scheme.
To introduce an employment status declaration to encourage the Industry to get the employment status of its workers right.
I have asked the Inland Revenue to work closely with the Construction Industry on developing the detail.