Industry quits taskforce over tax scheme row

Industry representatives have walked out of a taskforce formed to implement changes to the construction tax scheme after talks with HM Revenue & Customs failed to delay its start date.

The Joint Taxation Committee of industry representatives, which includes Construction Confederation tax director Liz Bridge, resigned from the task force last Friday after the Revenue refused to move the scheme’s April 2006 start date.

Bridge said she did not want to be linked to the introduction of a scheme that would cause chaos for the industry. With eight months to go to start date, the necessary software has not been fully developed, and contains known administrative problems.

Bridge said: “This scheme is not just a sinking ship – it’s going to explode. The JTC has resigned from the taskforce on the basis that we no longer want any Revenue publicity suggesting the industry supports the launch. All action from now on will proceed against our will. We will no longer be party to official discussions.”

This scheme is not just a sinking ship – it’s going to explode

Liz Bridge, CC tax director

Although the Revenue has refused to delay the introduction of the scheme, it has agreed to suspend fines for late returns until October 2006. However, the late submission of returns will be noted in a firm’s compliance record and could jeopardise a subcontractor’s gross payment status.

A Revenue spokeperson said: “We are naturally disappointed that the JTC has decided to formally withdraw from the forum. We firmly believe that continued dialogue is the best way of identifying mutually acceptable solutions to problems and we have asked them to reconsider their decision.

“Key trade and professional bodies remain represented around the table and we will be looking to add to membership of the implementation panel. We believe that, although challenging, the April 2006 timetable for delivery is achievable.”