Most contractors working within the construction industry must register with HMRC for Construction Industry Scheme (CIS) purposes to deduct subcontractors’ tax payments and pay this over to HMRC, and we can advise when this should be done. Subcontractors’ tax deductions count as advance payments of their tax and National Insurance contributions so it is imperative they are correct. The necessary rate of tax must be deducted from subcontractors used and paid over to HMRC by the monthly deadline. HMRC have very specific guidelines as to what types of construction work do and do not fall under CIS, so the need for receiving clear advice from professionals should never be underrated. Not registering for CIS when required to do so can leave your business exposed to the risk of unpaid tax as well as penalties from HMRC.
LR Accounting have extensive experience preparing accounts and tax returns for both contractors and subcontractors working in the construction industry, as well as filing a company’s or individual’s tax returns when CIS deductions need to be included.
From 01 October 2020, HMRC are introducing the ‘VAT domestic reverse charge’ to stamp out contractors claiming VAT back which they aren’t entitled to. Construction industry contractors and subcontractors will need to handle VAT on invoices in a different way. Don’t get caught out! Contact us to ensure you are set up to comply with HMRC’s new guidelines for CIS contractors dealing with VAT.