HM Revenue and Customs has postponed the launch of an
online tax filing system that employers believed would create major
problems for firms forced to adopt it.
Construction sector employers and their software suppliers had
lobbied HMRC for a delay to the CIS (Construction Industry Scheme)
system for the past year. They had argued that HMRC had not
provided sufficient time for companies to test their software with
HMRC's new IT system.
Construction companies will now be required to validate their
sub-contractors' tax status using the CIS system from April 2007
rather than April 2006.
Dennis Keeling, chief executive of the Business Application
Software Developers' Association (Basda), said, "We are very
pleased with the result - it is a bit of a shock to us."
Basda sent HMRC a letter shortly after the general election
requesting that it delay the mandatory introduction of CIS by a
year.
HMRC said, "We have been monitoring industry's implementation
progress for some time. Latest soundings indicated that the
cumulative risk around readiness had become unacceptably high."
HMRC has also postponed the launch of a third-party website for
testing suppliers' messaging capabilities. The website had been due
to go live this month.
Civil servants have yet to confirm when construction companies
will be able to do end-to-end testing with the CIS system.
Keeling said, "I understand they want much closer co-operation
with all sides of the construction industry and with software
developers."