In the 2014 Budget the government announced that it would consult on options to improve the operation of the CIS scheme for smaller businesses and to introduce mandatory online CIS filing for contractors. The consultation has now taken place.
A key reform concerns changes to the requirements for subcontractors to achieve and retain gross payment status. There are proposals for simplifying and improving the compliance and turnover tests which will enable more subcontractors to access gross payment status. The current £30,000 turnover test for sole traders will not be changing but the government proposes lowering the threshold for the upper limit of the turnover test to help more established businesses with multiple partners or directors qualify for gross payment status. The current upper threshold of £200,000 could fall to as little as £100,000.
Some compliance tests would be relaxed so that it would be easier for subcontractors to retain their gross payment status.
Improvements will be made to the IT systems to provide a better CIS online service for contractors. These will include the online system for verification of subcontractors by contractors.
The government is also proposing to remove the option of verifying subcontractors by telephone.