CIS Contractors

‘Twas not long before Christmas, as day turned to night
Eight contractors were leaving a busy construction site
Their work was done, until the new year
They were ready to holiday and be of good cheer

But over in the office, there were many things to be done
And paying those sub-contractors was but one
The money will be transferred straight into their banks
They no longer stand in line for their cheques, giving thanks

But what about tax, I hear you scream
We need to think about the Construction Industry Scheme
It’s a scheme that determines what tax to withhold
And its compliance by HMRC is strictly patrolled

CIS is for construction businesses big and small
But non construction businesses can within CIS fall
If in a year they spend £3 million or more
On construction work, so it’s not to ignore

Firstly though, you need to be sure,
As, getting this wrong will be hard to endure,
That the contractors are not in reality employed
In which case instead, there’s PAYE to be deployed

Then to check whether to pay gross or net
Are all the compliance requirements met?
As getting this wrong could work out expensive
If HMRC decide to go on the offensive

There’s a recent tribunal where withholding was done wrongly
HMRC had no sympathy and pursued it very strongly
The main contractor’s processes and knowledge were lax
So, the tribunal insisted that payments suffer double tax

And the cost of materials, for CIS tax doesn’t count,
But are you sure you’ve shown the right amount?
HMRC investigates this with a critical eye,
Scaffolding, plant and other costs can go awry

Support on this area is what we can give
Across the UK wherever you live
Compliments of the season, from Lee, Paul, David, Becky and Leah.
Merry Christmas and a Happy New Year.

If you need any help with employment tax matters, either for the Christmas past, present or the future, please get in touch with us at employmenttaxesteam@unw.co.uk.