Her Majesty's Revenue and Ccustoms estimated that the annual cost to business as a result of the new Construction Industry Scheme (CIS) would be around £30m. It was on the basis of this figure that the Treasury approved the launch late last year.
 
However the figure does not take into account such things as the initial costs of purchasing new software for the scheme, installation and training. Instead the ICAEW have suggested the scheme could cost nearer to £280m.
 
The scheme will rely heavily on online facilities and a monthly return, rather than the previous system of exemption certificates, registration cards and annual returns.
 
Howard Royse, ICAEW's construction industry representative and a practitioner, said: "It calls into question HMRC's ability to assess accurately the workings of the industry, not least its estimate of unpaid tax that it claims is attributable to the incorrect treatment of subcontractors."

The scheme will come into force on the 6 April.