A New Construction

26 January 2005 / Rebecca Benneyworth

Issue: 3992 / Categories: Comment & Analysis , Business , Income Tax

REBECCA BENNEYWORTH summarises the main changes for contractors and subcontractors under the new construction industry scheme rules that are due to commence in 2006.

THE CONSTRUCTION INDUSTRY Tax Deduction Scheme (CIS) was earmarked for significant further reform as long ago as November 2002. A consultation document was issued at that time and the Inland Revenue held face-to-face consultation meetings with various segments of the building industry. The modernisation of the scheme (although last revised as recently as the mid 1990s) was due to be implemented in April 2005. However in the Pre-Budget Report of December 2003 it was announced that the new scheme would not now commence until 2006.

In the event this cautious approach to the new scheme is to be welcomed because the new rules are not a mere tinkering with the existing scheme but a completely new scheme essentially starting from a blank sheet of paper. The primary legislation is included in FA 2004 Ch 3 Pt 3 and has followed the...

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