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Taxman classifies computer installation as construction

Special certificate required before invoices can be paid

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Computers and houses. Can you tell the difference? The Inland Revenue can't. Under the new "Construction Industry Scheme" (CIS), the installation of a computer is defined as a construction operation. Soon it will be illegal for any large organisation to pay an invoice from a computer supplier or manufacturer who installs a computer or other 'instrumentation system' without a CIS certificate. Failure to comply with the new regulations could result in a £3000 fine. The Revenue accepts that a laptop computer is exempt from the CIS, but insists that anything involving drilling a hole in a wall is construction and, according to our source, will not accept that there is a threshold value below which jobs should be excluded. The taxman has admitted to at least one computer equipment supplier that it has made a mistake. Although at press time, no one at the Inland Revenue was available for comment. The scheme itself is not without controversy. It is the latest 'oops'-inducing incident involving the government and computer systems. The new certificates were due to come into force on August 1, but computer system delays has forced the Inland Revenue to issue temporary extensions to existing certificates. Sound familiar? ®

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