The new penalty regime for the late payment of income tax and VAT is “overly complex” and needs to be simplified, according to the Tax Faculty’s response to the Finance Bill. It’s also recommending the deferral of changes to the construction industry scheme.

A host of tax changes come into force from the start of April 2021, including the long-anticipated introduction of off payroll working (IR35) and the next phase of requirements under Making Tax Digital for VAT. ICAEW’s Tax Faculty outlines what you need to know.

26 January 2021: After several delays HMRC’s VAT domestic reverse charge for construction services is due to come into force on 1 March 2021. ICAEW’s Tax Faculty provides a reminder of the changes.

8 January 2021: HMRC needs to publish draft regulations and guidance detailing forthcoming changes to the construction industry scheme or consider pushing back implementation until 2022, according to ICAEW.

13 November: HMRC has published draft Finance Bill legislation to tighten up the construction industry scheme (CIS).

A chapter discussing the ways in which employment status may have to be considered by a business when it incorporates.

Practical guidance on how the Construction Industry Scheme (CIS) applies to businesses within the UK tax regime.

Brief chapter on the obligations of the Construction Industry Scheme for traders that commission construction or refurbishment work.

Concise chapter providing guidance on partnership taxation for businesses in the construction industry, which are subject to the Construction Industry Scheme ('CIS').

HMRC internal manual providing guidance on how payments are taxed under CIS, covering contractors, subcontractors, deductions, compliance, monthly returns and the end of year process.

Guidance for contractors and subcontractors explaining the terms used under CIS, how payments are made to subcontractors, what HMRC requires from contractors, and guidance relating to businesses not resident in the UK.

Official guidance covering subcontractors and contractors responsibilities, returns, payments, businesses outside of the UK, deductions for limited companies, multiple contractor status and managing agents.