What are the key features to consider for CIS?
The main features of the scheme are:
- Monthly returns must be made to HMRC containing details of all payments made to subcontractors and any tax deducted
- There are penalties for late or incorrect monthly returns
- The monthly Return includes an Employment Status declaration which must be signed
- Businesses entitled to receive their payments gross can have this status removed at any time if they fail the Tax Treatment Qualifying Test.
- All businesses operating within the construction industry are affected
- Non-construction businesses spending an average of £1m or more per annum on construction are also covered
- Subcontractors may be entitled to receive their payments gross, net of a standard tax deduction of 20%, or a special rate of 30%.
- Businesses are obliged to verify all new subcontractors with HMRC to establish the correct tax treatment before any payments can be made
Do you still have questions? Get in touch with our employer services team to find out more about how they can help you.