New UK Construction Tax Tool To List All Workers

by Amanda Banks, Tax-News.com, London

01 February 2006

The UK's HMRC will not finally implement its Construction Industry Scheme until April, 2007, when a new on-line service will detail the employment status of all workers in the industry.

HMRC has launched a new helpline and the interactive online employment status indicator to provide comprehensive assistance to the construction industry in advance of the introduction of the new Scheme.

The helpline - 0845 366 7899 - will help support businesses in the run-up to the new CIS scheme's introduction in April 2007, and is open 7 days a week from 8.00am to 8.00pm (excluding public holidays).

Welcoming the new services, John Healey MP, Financial Secretary to the Treasury, said: "The introduction of the helpline and the on-line employment status tool are important steps in gearing business for the new CIS. They will provide a comprehensive service for businesses needing to find out about the changes to the scheme and to help them
determine employment status."

The helpline uses a new tool to help contractors and subcontractors determine employment status. The Employment Status Indicator (ESI) is a computer-based interactive tool which helps determine the status of those engaged by customers to find out whether they are employed or self-employed. The new ESI tool can also be accessed directly online, via the HMRC website so people in the industry can check their status directly if they so wish.

The employment status website can be found at www.hmrc.gov.uk/employment-status HMRC have been contacting all
contractors directly during the course of this month, giving them details about the new scheme and signposting them to the helpline and on-line ESI.

The New CIS will result in two main changes. At present, the identification card or certificate held by the subcontractor must be presented to the contractor before a contract is entered into under the provisions of the current scheme. These cards and certificates are being replaced by a new verification service requiring the contractor to establish the tax payment status of the subcontractor before making any payments under the new scheme.

Contractors' existing practise of using vouchers to account for payments and tax deducted under the current scheme will be replaced by monthly returns. The monthly return contains a declaration that the contractor is satisfied that the payments included in the return are not made under a contract of employment.

The new scheme will apply to around 200,000 registered contractors and 900,000 subcontractors.

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