In the second of three proposed changes to CIS taking place over the three years 2015, 2016 and 2017, from 6 April the tests to acquire and retain gross CIS status will change – which is intended to make them easier.

If you pay income tax, corporation tax and PAYE on time, and submit CIS returns on time, you ought to be able to get or keep gross CIS. And the turnover thresholds are being reduced.

If you or your subcontractors do not have gross status, it might be worth applying for it after April.

But don't forget, the CIS is a means of deducting tax from payments made to subcontractors in the UK construction industry in order to minimise tax avoidance – and that remains its aim.

The legislation changing the Construction Industry Scheme (CIS) tax regime was announced in the 2014 Autumn Statement.

A number of changes came into effect last year, including relaxing the requirements for joint ventures to gain gross payment status in some situations. The need for contractors to submit a nil return in months when no payments had been made was also removed – although contractors can still submit a nil return if they choose to do so. In a further change, contractors and their authorised agents are now able to appeal against late filing penalties using HMRC’s online Penalty Appeal Service.

This year's changes include:

• Compulsory online filing. The online filing of CIS returns will become mandatory and contractors will no longer be able to submit returns by paper, other than in certain circumstances – for example, if an individual is unable to access a digital channel or objects to online filing on religious grounds. As well as submitting returns, contractors will also be able to amend and resubmit their returns online.
• Simplifying the compliance test. Directors’ self-assessment obligations will no longer be taken into account when determining whether a company is eligible for gross payment status.
• Reducing the threshold for the turnover test. When a company has multiple partners or directors, the threshold for determining gross payment status will be reduced from £200,000 to £100,000.

A further update is due next year (2017). Currently contractors are able to verify whether subcontractors can be paid gross by telephone or online. However, the telephone option is to be discontinued from April 2017, so subcontractors will have to be verified online in most cases.

Following this year’s changes, it will still be possible to process CIS payments manually – however, it is important to note that this may take more time and effort than in the past.