Taxman stands firm over online filing

HM Revenue and Customs is pressing ahead with a compulsory shift to online tax filing for the construction industry, despite warnings that too little time has been made available for testing.

HM Revenue and Customs is pressing ahead with a compulsory shift to online tax filing for the construction industry, despite warnings that too little time has been made available for testing.

HMRC has rejected a request from the Business Application Software Developers' Association (Basda) to run its new system in parallel with the existing system from April 1 2006.

Basda chief executive Dennis Keeling said, "The Revenue has not given us sufficient time. We will have the facility to test the systems ourselves, but the customers will not have the opportunity to test the systems before they go live next year."

The Construction Industry Scheme (CIS) is an electronic means of deciding which sub-contractors are paid gross and which have tax and national insurance deducted at source.

From April 2006, every construction company that uses sub-contractors and every other employer that drafts in sub-contractors for construction work will have to use the CIS.

Keeling said, "It's as if HMRC wants CIS to fail. The timescales are not enabling CIS to be achieved."

HMRC's system to receive incoming information will not be available to developers for testing until next month.

Developers will not be able to test other parts of the system until the New Year.

HMRC said, "As far as application developers are concerned, we understand concerns around the timetable, but we have done our best to help them prepare. For example, we have brought forward the release of a draft technical specification and we published the finalised specification on schedule."

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