Contractors and subcontractors working in the construction sector are required to operate within the confines of the Construction industry Scheme (CIS).
Broadly this requires contractors to verify self-employed subcontractors it has working for the contractor where the work being carried out is what is referred to as a construction operation. The scheme also has wider application in that it can also apply for non-construction sector businesses, where they spend significantly on construction. It is therefore relatively wide in scope.
The CIS requires contractors to verify with HMRC the identity and request confirmation of tax status of a subcontractor it engages before it makes payment to the subcontractor. HMRC will instruct whether tax needs to be withheld by the contractor and at what rate. Contractors are also required to file monthly returns to HMRC and provide statements to subcontractors where they have with-held tax.
We support subcontractors and contractors in regard to their verification, reporting and tax deduction requirements. This is an area where we are seeing regular and significant reviews by HMRC. We are very experienced in helping businesses ensure that their CIS processes are sufficiently detailed to meet the rigours of an HMRC review and allow the correct operation of the scheme on a day to day basis.
If you would like to discuss further how we can help with any of the above, please contact a member of our team.