Strengthening the tests for gross payment status for the Construction Industry Scheme

22 November 2023


Government has today (22nd November 2023) published the outcome of its consultation “Construction Industry Reform” which ran from April to July 2023.  See our previous news about the consultation here.

The summary of changes which will come into effect from 6th April 2024 are;

  • VAT compliance (filing and payment obligations) will be added to the Gross Payment Status (GPS) Compliance Test for being granted and keeping GPS. 
  • Previously, compliance with Pay As You Earn (PAYE), the Construction Industry Scheme (CIS), Income Tax Self Assessment and Corporation Tax Self Assessment were reviewed/monitored. 
  • The grounds for cancellation of GPS with immediate effect (under s66(3)(ii) Finance Act 2004) will be expanded to include occasions when HMRC has reasonable grounds to suspect the provision of an incorrect tax return or information in fraudulent circumstances in regard to VAT, Income Tax Self Assessment, Corporation Tax Self Assessment or PAYE.
  • A decision to award GPS will be subject to a compliance review after 6 months (previously 12 months) and then on a rolling 12 month schedule.
  • Government state “minor” VAT compliance failures won’t be taken into account.
  • Applications for CIS registration will be digitalised.   
  • Removal of the majority of payments from landlords to tenants from the scope of CIS.

Read the outcome of the consultation here.

Read the policy paper ‘Strengthening the tests for gross payment status for the Construction Industry Scheme” here.