New CIS scheme from 6th April 2007
HM Revenue & Customs announced dramatic changes to the CIS scheme which became active on 6th April 2007.
These include an increase in the basic tax deduction rate from 18% to 20% and a higher 30% band for any subcontractors which you cannot successfully verify as being registered with HM Revenue & Customs.
In addition, contractors are now required to complete monthly returns rather than annually.
If you require any more information about the new scheme or wish to enquire about the services we are providing to assist clients within the construction industry please contact us.
The government have announced plans to reduce all paper filing with HMRC and increase the use of the online filing systems currently in place.
These included stopping all paper VAT returns for new VAT registrations after 1st April 2010 and for any current VAT registration with turnover above £100K.
The government will assess VAT registrations below this limit by 2011/2012
All Corporation tax returns will need to be filed online by 1st April 2011.
From 2007/2008 onwards, all self assessment taxpayers will only have 6 months to file paper returns, the new deadline being 31st October. The filing period for online returns will remain at 31st January.
Budget 2007 – Tax Rate Changes
The Chancellor announced plans to decrease the personal tax basic rate band from 22% to 20% with effect from 6th April 2008, along with the removal of the starting 10% band (excluding savings and gains tax where the 10% band will remain in place).
Similarly, the Chancellor has announced that he will reduce the higher rate of Corporation tax from 30% to 28% in April 2008.
In addition to the reduction, the government plans to increase the small companies rate of corporation tax by a further 2% over the next 2 years (21% in April 2008 and 22% in April 2009) along with adjustments in marginal relief (1/40) to smooth the difference between the higher and lower bands.
If any of the above issues effect you or your company, or you wish for more information, please do not hesitate to contact our office where will we be more than happy to help.
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