If you are working within the construction scheme and make use of the services of a sub-contractor you are required to deduct money from their pay and pass this to HM Revenue & Customs (HMRC). This money is then held on account by HMRC and used to settle the subcontractors own tax liabilities.
As a contractor you have a duty to contact HMRC and verify that the sub-contractor is registered with them. HMRC will then tell you the percentage of tax to deduct from the monies you to pay to them. You will also be required to file monthly returns, even if you have not paid any sub-contractors and provide the sub-contractor with a deduction statement for their own tax records.
If you fail to meet your obligations as a contractor HMRC will charge you penalties starting at a rate of £100 per month.
At HSC we offer a service that will ensure you meet all your obligations under the CIS scheme. Our service will include:-
- Advice on whether your work falls within the construction industry scheme
- Advice on the employment status of a new worker. Are they a sub-contractor or an employee?
- Registering your business as a contractor with HM Revenue & Customs
- Verification of all new sub-contractors with HM Revenue & Customs
- Calculation of monthly deductions and preparation of deduction statements.
- Filing the necessary monthly forms with HM Revenue & Customs.
- If you are a sub-contractor yourself advising whether you are eligible to apply for gross status.
If you require any further information please contact Tom Bowen or request we contact you using the box below.