Details of the online system have yet to be worked out, but it would eliminate the need for vouchers as payment details would be sent to the Inland Revenue via secure email.
The head of tax at the Construction Confederation, Liz Bridge, said a scheme where certification and voucher completion could be managed electronically would reduce the large volumes of paperwork completed each month.
She said: "The new scheme would mean a contractor could access the Revenue's website and report the payment made to a subcontractor at the press of a button. We need to work with the Revenue to do this." Bridge said the confederation had held two meetings with the Inland Revenue to discuss the issue since December. She expects the move to electronic tax submissions to take five years.
It is nonsense to be relying on a paper-based system today. We need an electronic one
Under the CIS scheme, which got under way in November 1999, contractors and subcontractors must complete monthly vouchers for each company to report how much they have been paid. These are then posted to the Inland Revenue. Each firm must also register for a tax certificate.
Bridge said it was more practical to send documents by email than post. She said: "At the time the CIS scheme was being developed, nobody had access to email, only a few anoraks. Now we have internet cafes. It is not a resource issue. It is an education issue." The Construction Confederation is also pressing the Treasury to support the change to an electronic system by providing the Inland Revenue with resources to make the change. In a pre-budget submission sent to Gordon Brown last month, Construction Confederation chairman Peter Andrews said: "In this day and age it is nonsense to be relying on a paper-based system. We need an electronic one that allows all certification and vouchering to be done by email." The Construction Confederation letter also urged the Treasury to reduce VAT on domestic repair and maintenance from 17.5% to 5%. It argues that this would help drive out cowboy builders and improve safety.
Andrews also described the quality mark, the government registration scheme that aims to drive out cowboy builders, as a flop.