HMRC Consults on Simplifying the CIS Administrative Burden
14/06/2023

HMRC has launched a consultation to address the administrative burdens associated with the Construction Industry Scheme (CIS). The focus of the consultation is to simplify reporting requirements for landlord-tenant payments and streamline group reporting obligations within the construction sector.

Currently, landlords have the responsibility of determining whether CIS should be applied to payments made to tenants. This has led to complications in transactions, making compliance challenging for both parties. In response, the consultation proposes treating certain expenditures as outside the scope of CIS, allowing deduction-free payments and easing administrative burdens.

Another area of concern is group reporting, particularly prevalent in the property sector, where property groups comprise numerous companies responsible for individual property maintenance. The current process requires significant time and effort to identify which companies must file returns and which can file nil returns. To simplify this, the government suggests exploring a "CIS grouping arrangement," where a single nominated company would submit a consolidated monthly CIS return on behalf of all group companies.

By addressing these issues, the aim is to streamline CIS processes, reduce administrative burdens, and enhance compliance within the construction industry. The consultation invites stakeholders to provide feedback on these burdens, proposed solutions, and additional areas for simplification. The consultation period will close on 20 July 2023.

Stay tuned for updates on the proposed reforms, as HMRC seeks to make the Construction Industry Scheme more efficient and manageable for landlords, tenants, and property groups.

Remember to consult the official HMRC resources for detailed information and guidance regarding the Construction Industry Scheme and its potential reforms.