In the Autumn statement in November 2023, the changes to Construction Industry Scheme (CIS) was announced which will be into force from 6 April 2024. What are implications for individuals and businesses within construction Industry Scheme?

Gross Payment Status

To maintain the GPS status, subcontractors must pass three tests:

1. Compliance
2. Turnover
3. Business

HMRC may also immediately cancel GPS when a contractor or subcontractor do not comply with an obligation referring to CIS legislation.

Payments made by landlord to tenants

A new regulation 20A has been added to Income Tax (CIS) regulations 2024. Where if any payments made by landlord for the purpose of construction operations are outside the scope of CIS.

To fall within the scope of 20A, the payments must meet the following conditions:

1. Payment must be made by landlord.
2. Payment received by tenant/perspective tenant.
3. Payment should be in relation to construction operations with a lease or enforceable agreement for lease.
4. Tenants who occupy or will occupy will conduct the operation themself or with third party.
5. The payment made for construction operations must intend to benefit the tenants that occupy or will occupy the property under lease.

We are here to help if you are unsure about any of the provided information and want to know more about CIS Regulations. Lince Salisbury can help individuals and businesses to understand the process, HMRC enquiries, assisting with in-house bookkeeping, and general advice on any area of the scheme.