HMRC is urging contractors to regularly verify the Construction Industry Scheme (CIS) status of their subcontractors. The reminder comes as HMRC has identified instances of incorrect CIS tax deductions by some contractors.
As part of its latest outreach campaign, HMRC is highlighting the need for contractors to:
a. Verify all new subcontractors before making any payments.
b. Verify subcontractors previously used if they haven’t been included in a CIS return during the current or previous two tax years.
c. Ensure the correct CIS deductions are applied.
Contractors can verify subcontractors using HMRC’s online service or commercial software. For verifying more than 50 subcontractors, the use of commercial software is required.
HMRC warns that failure to take appropriate action may result in a compliance check.
If errors are found in a CIS return during such a check, any disclosure made by the contractor will be treated as prompted, potentially increasing the penalties imposed.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
