A significant number of businesses in the construction industry face losing their Gross Payment status as a result of deferring tax payments, despite often having discussed the issue with HM Revenue & Customs in advance.
Late payments agreed in advance with the Revenue’s Business Payment Support Service enable businesses registered under the Construction Industry Scheme (CIS) to continue to pay “on time”. However, in a number of cases where requests to make use of this facility have not been processed correctly, Gross Payment Status has come under threat.
The loss of Gross Payment Status must be declared to all existing clients of a business, and can have a damaging affect on customer relations, especially in tough economic times. For construction businesses that may already be suffering from cash flow issues, this can be particularly harmful.
CIS businesses should ensure they make arrangements with HM Revenue & Customs at the earliest possible opportunity, and ensure they take officers’ names and case reference numbers from all correspondence.