Happy Birthday, New CIS!
March 27, 2008 by mike · Leave a Comment
The New Construction Industry Scheme will be officially one year old in two weeks; on April 6th 2008. After a very shaky start with plenty of mass confusion, hysteria and technical glitches, have HM Revenue & Customs (HMRC) and the construction industry finally gotten their systems “bedded down” for new CIS compliance or are there still problems?
UK construction companies expected to pay £47 million in late filing penalties
A recent article AccountingWeb reveals some rather interesting statistics on the CIS penalties for late monthly returns that UK Construction Companies have racked up since last October:
Rebecca Benneyworth writes:
The number of penalty notices issued for late CIS monthly returns are shown as:
- October 2007: 35,919 (> £3.5M)
- November 2007: 44,921 (> £4.4M)
- December 2007: 37,618 (> £3.7M)
She adds, “So a total of 118,458 notices were issued in a three month period, bringing in fines of at least £11.8 million (as the minimum penalty is £100). Assuming that these three months are representative of a normal quarter, this would bring an annual yield from penalties for the new CIS 300 to over £47 million.”
Source: AccountingWeb / Hansard
Although we don’t know how many of these automatic penalties were issued in error (and hence would be invalidated under an appeal), we do know that the standard fine is £100, and the serious fine as high as £3,000 per subcontractor per month, which suggests a yield from just the monthly return of £47 million per year. Read more
A winning letter
August 31, 2007 by mike · 2 Comments
It’s been a while since I last updated my blog. There’s many reasons, mostly work related; I’m always busy. I’m not sure if that’s a good thing, it’s been 18 months since my last holiday - a two day break in bath. According to the beeb, I’m not alone. Must be ok then, I keep telling myself!
This month I won the prestigious “Winning letter“ in Payroll World. It was my words, but I didn’t actually send a letter in. Payroll World read my blog for the content, and managed to put together a decent edit of my point. Plus, I win a bottle of Laurent Perrier champagne. When that baby arrives it’ll make for a pleasant start to the weekend (and a change from the usual Tesco special offer wine deals).
I’ve also been quoted in a followup article running in the same edition too. You should head over to the Payroll World Website to read it, but since they only keep content up for a few weeks I have reposted the article in which I am quoted here on my blog:
The winning letter
The followup article
There’s not much else left to add, except for an update relating to HM Revenue & Customs….
They’ve asked me to drop my case.
I have, in the interests of running my own businesses and doing right by my customers, agreed to “ignore” or “overlook” the previous issues. I’ve provided all the information to HM Revenue & Customs, who inform me that they have passed this information onwards and upwards up the chain of beauracy. I’m not an industry campaigner, and I have no grudge against HM Revenue & Customs. However, the government need to learn how to take better care of its customers, just like us private businesses have to take over ours.
The point still stands however
HM Revenue & Customs still use two different methods for online and offline verifications. Admittedly, an entire 10 consecutive days have passed with not a single customer bringing this issue up. Is it fixed or have customers just learnt to work around or ignore the problem?
Either way, I shall be putting my attentions onto working on great software - and according to the wishes of HM Revenue & Customs - ignoring the problems that have gone on to date. We plan to log all future enquiries relating to this problem, and we will judiciously report these to HM Revenue & Customs. The problem is, that investigating these issues takes time. Our customers need to spend resources - people and time - and so do we - a costly exercise - to provide HM Revenue & Customs with this diagnostic information. These costs should be borne by HM Revenue & Customs, not us, and certainly not our customers.
I don’t plan to write much more on this issue and everything has already been said. I had some exciting and interesting articles planned, but haven’t got around to writing them yet.
Let’s hope things get better before October 19th.
