AJE Consulting is a business consultancy firm specialising in providing an advisory service on the operation of, and compliance with, the Inland Revenue Construction Industry Scheme.
The current Inland Revenue scheme was introduced in August 1999 and we find that clients are still having difficulty in meeting all of the compliance obligations imposed by the scheme.
Part of the problem lies in the fact that, from August 1999, contractors had to set up from scratch new internal procedures and systems to implement the scheme. Unfortunately, few, if any, of the staff involved in administering the scheme have ever received any practical advice on whether or not their systems are adequate to satisfy the Inland Revenue.
Given that the tax legislation imposes financial penalties where an organisation fails to operate the scheme correctly, we believe that it is vital that contractors ensure that all staff involved in engaging sub-contract workers are aware of the tax rules and understand what work is included within the scheme.
This means understanding when a worker must be treated as an employee as opposed to being treated as self-employed, as well as understanding what documents must be produced before payment can be made to a self-employed worker.
The training seminar on the Inland Revenue Construction Industry Scheme not only provides a general overview of the Scheme but in addition, also provides detailed practical guidance and advice on how the Scheme should be operated. The session normally lasts for approximately 1½ to 2 hours and covers key areas such as employment status, the scope of CIS, inspection of CIS certificates and cards, what records to keep and why, and what to do at the end of the tax year.
Those non finance staff who have some impact on the operation and management of the Scheme within the organisation are also encouraged to attend to ensure that they have an understanding and an awareness of how the Scheme operates as a whole throughout the organisation.
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