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Following industry representations, the Inland Revenue has announced, as part of the Chancellor's statement, pre-budget staged, but welcome, changes to the tax deduction scheme.
More firms can now qualify for a CIS 5 and, if they so wish, details of payment can be provided electronically to the Inland Revenue.
The first stage will reduce the turnover test for a CIS 5 certificate to £1 million. This will be available to limited companies from the end of November 2000 and to partnerships from April 2001.
Although the changes are a major step forward, it still leaves numerous smaller firms with a good tax record bearing costly administration associated with CIS 24 certificate procedures. Consequently FMB believes that there is justification for allowing many more CIS 6 certificate holders to become CIS 5 certificate holders. Moreover something must be done to stop CIS 4 certificate holders increasingly switching their activities to the underground economy to evade tax and National Insurance contributions. This phenomenon is harming government revenues and badly undermining the structure of the industry.
FMB will make these views known as part of its formal response to the Chancellor's statement.
For further information contact Ian Davis on 020 7242 7583.
First posted: 13 November 2000. Last modified: 17 November 2000.
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