In a letter to paymaster-general Dawn Primarolo, the Confederation of Construction Specialists has asked for a six-month delay to the full introduction of the Construction Industry Scheme – the tax system replacing the 714 self-certification scheme.
Confederation chief executive John Huxtable said his members did not want the new regime to come into full effect until next April, when it would coincide with the new tax year.
The changeover to the new regime has been widely criticised by specialist and small contractors. The Forum of Private Businesses, which has several small contractors as members, has written to chancellor Gordon Brown to ask him to extend the old scheme until April.
The Construction Industry Scheme was due to come into effect on 1 August 1999, but, because most subcontractors had not received the necessary documentation, the Inland Revenue introduced a transition period. Now firms have until 5 November to comply fully with the new scheme.
However, Huxtable said the November deadline was looking increasingly optimistic.
The government is not interested. It’s not joined-up thinking; it’s turned-off thinking
John Huxtable
“Our members are in chaos. The November deadline is not long enough,” he said.
Huxtable wants the government to extend the dual scheme whereby contractors can use either the old 714 system or the new Construction Industry Scheme system.
“I wrote to the government in June and have had no response since then,” he said. “The government is just not interested in subcontractors. It’s not joined-up thinking; it’s turned-off thinking,” said Huxtable.
The Construction Confederation does not support the appeal. Its tax specialist, Liz Bridge, said: “It isn’t wise to run two schemes at once. Where people are using one scheme or another, someone will always be at a disadvantage.” Bridge added that the pressure is starting to ease on members. However, she is expecting a “new wave of desperation” during the 6-19 September fortnight, which is the period from the end of the August tax month (5 September) when contractors have to send their CIS25 voucher receipts showing how much they have been paid.
“Firms must make sure they have the right blank forms now,” warned Bridge.
