CIS Abuse Rules A shake-up of VAT rules could impact the cash flow of businesses in the construction sector, many of whom are covered by the Construction Industry Scheme (CIS).
The UK government is rolling out a reverse charge initiative aimed at tackling fraud within the construction industry. This happens when suppliers or ‘subcontractors’ charge main contractors VAT but ‘disappear’ before passing the same to HMRC.
The Construction Industry Scheme (CIS) is a set of special CIS Abuse Rules for tax and National Insurance for those working in the construction industry. It was announced at Spring Budget 2020 that a consultation on measures to tackle abuse of the CIS would be launched.
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Following the consultation and further meetings with those working in the sector four new changes to prevent CIS abuse are set to come into effect from 6 April 2021.
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