Construction Industry Scheme: What are the Changes?

Changes to the Construction Industry Scheme (CIS) kicked in on 6 April 2024, with VAT filing and payment obligations now added to the compliance test for gaining and retaining Gross Payment Status (GPS).

For existing GPS holders the compliance test will only consider VAT compliance from 6 April 2024.

To ensure minor VAT compliance failures will not result in GPS refusal or removal, there will be exceptions to compliance obligations, HMRC said.

In line with other taxes, the following failures will be overlooked:

· three late submissions of VAT returns — up to 28 days late.

· any late payment of VAT where the amount is under £100.

· three late payments of VAT liability of £100 or more — up to 14 days late.

Existing appeal rights will apply and GPS will not be removed where there is a reasonable excuse for any compliance failures.

HMRC is also bringing forward the first review of compliance from 12 months after application to six months. After this point it will revert to 12 months.

HMRC said it is updating the CIS Reform Manual (CISR) to reflect the changes.