New “disastrous” CIS changes announced that could make subcontractors suffer

After yesterday’s Autumn Statement it was announced that among other changes, subcontractors will have their VAT records checked as part of the CIS compliance test.

It is believed that the addition of the VAT checks will give “HMRC more power to remove Gross Payment Status immediately” and is aimed at tackling VAT fraud more directly.

According to critics it is unlikely to prove effective and will just be more red tape for small businesses and subcontractors. This along with the added complexity could see businesses brought to their knees whilst trying to dispute claims with HMRC, something many already say are unnecessary and over-complicated.

With a real threat of businesses losing CIS Gross status there are calls for a strict set of rules and restrictions on how HMRC uses this new system. It is hoped that clearer limits would help ensure that it doesn’t bring down the very businesses they claim to help.