The Institute of Chartered Accountants in England and Wales (ICAEW) has called for greater guidance from HMRC regarding upcoming changes to the construction industry scheme (CIS).
The changes to the scheme are designed to tackle abuse of the CIS rules by “removing scope for different interpretations of the existing rule”.
However, with the April 2021 deadline approaching and HMRC yet to publish secondary legislation, guidance, or the IT specifications needed to make any necessary changes, the (ICAEW) has asked the government body for greater clarity on the situation.
In a draft finance bill, the public body claimed that “draft regulations need to be published imminently” for firms in the sector to fully understand the upcoming changes.
Moreover, with confusion still prominent in the industry regarding the regulation changes, the ICAEW has recommended “deferring commencement until April 2022”.
Not only has the tax faculty called for greater time and transparency from HMRC, but it has also questioned the content of the CIS change.
From April it will be ensured that when a sub-contractor incurs the cost of materials there will be no possibility for deductions through CIS, a change the ICAEW has deemed “not a clarification of but a change in the law”.