HMRC publishes response to the consultation: Changes to tackle Construction Industry Scheme abuse 16 November 2020
HMRC recently published a consultation that assessed the ways in which abuse within the Construction Industry Scheme (CIS) could be tackled. It has now published its response, and the accompanying draft legislation.
The consultation gave details of a new power, which would allow HMRC to correct CIS deduction amounts claimed by sub-contractors on employer returns, it also set out changes to a number of the CIS rules to either confirm their meaning or expand their scope, and it discussed preliminary ideas on construction supply chains, assessing whether they could help to prevent tax loss.
The consultation response confirms that the Government will legislate to provide for:
• The power to allow HMRC to make changes to certain CIS deduction claims on employer returns • Amendments to current rules on the cost of materials and deemed contractors • The expansion of the scope of the CIS false registration penalty From the findings of the thinktank roundtable meeting and the survey that the CIPP ran, which formed part of our response, it became apparent that many of those impacted believed that the proposed 14-day period which a subcontractor has, to provide evidence of a genuine deduction was too short. HMRC has listened to the concerns raised, and has confirmed that, should the 14-day timeframe not be realistic, then sub-contractors may liaise with HMRC to agree on a mutually acceptable timeframe in which to make the correction.
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HMRC publishes response to the raising standards in the tax advice market consultation 17 November 2020
HMRC has published its response to the consultation that sought to raise standards in the tax advice market, and has outlined four key steps that it will take to ensure that this happens.
The four main areas of focus are to be:
• Raising awareness of HMRC’s standard for agents, whilst also reviewing its enforcement - HMRC intends to raise awareness of the standard, so that more people can access and review it. It will also publish the results of an internal review of the powers that HMRC has to help to enforce the standard • Consulting on making it mandatory for tax advisers to hold Professional Indemnity Insurance (PII) – This would result in higher standards and remove high-risk advisers, who may not be able to obtain insurance. There will also be further consideration given to a more formalised definition of tax advice, and what activities it should be applied to • Working with professional bodies – There will be continued work carried out alongside adviser professional bodies to assess how they support their members and to raise standards in the tax advice market • Working on the cost of tax repayment agents – There are concerns around how much it costs taxpayers to receive advice and the Government will be reviewing how best to tackle this HMRC has also confirmed that it will continue to work with professional bodies in order to raise standards in this space, to ensure that taxpayers can make cognizant decisions prior to receiving tax advice. This involves providing the reassurance that the guidance they receive is professional and trustworthy.
There were 83 written responses submitted to the Government – 24 of which came from professional bodies, and 18 from accountancy firms.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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