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NEWSLETTER APRIL 2007

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NEWSLETTER
APRIL 2007

Now that the new Construction Industry Scheme (CIS) is upon us we have set out a number of reminders for contractor clients. There is also a note of new rules for self employed persons working at home, changes to the VAT cash accounting scheme, and finally a short summary of the increases and decreases in corporation tax and income tax rates announced in the Budget March 2007.


Construction Industry Scheme – D-day has arrived!

The new tax regime for contractors will commence the 6 April 2007.

We have summarised below those issues that need to be dealt with now by all parties affected.

  1. Subcontractors holding CIS 4 registration card.
    Subcontractors will no longer need to carry a CIS card when they start on a new site. Instead they will need to provide their tax reference number and National Insurance number to the contractor to enable them to verify their tax status with HMRC. They will receive a payment advice at least once each tax month advising them of the amount they have been paid by each contractor, how much has been allowed for materials costs and the amount of tax they have suffered.

    Don’t forget that from 6 April 2007 the amount of tax stopped will increase from the present 18% to 20%.

  2. Subcontractors receiving gross payments.
    Subcontractors whose existing Exemption certificates are still current at the 6 April 2007 will no longer have to present them to contractors after this date in order to secure gross payment.

    If your old style certificate has expired on or before the 31 March 2007, and you have not renewed before the expiry date, contractors will be obliged to stop tax from your earnings after 6 April 2007 at 20%. Your reme