Are you a contractor or an employer?
Do you have time to check your subcontractor’s status with HMRC?
Are you struggling to keep up with providing statements?
Then there’s the monthly returns to be sumitted to HMRC by the 19th of each month, not to mention the fines if it’s late!
The construction industry tax regulations are only relevant when all 3 of the below elements are present:
- Construction Operations
- Self Employed Subcontractor (or Subcontractor Company or partnership)
One of the main points to consider is whether an individual subcontractor is really self-employed. If you get this wrong, it could become very costly.
If the indicators below are present then the individual is likely to be an employee:
- Set Hours
- Paid an hourly rate
- No substitute allowed
- Contractor controls the individual
- Contractor pays for all the individual’s tools and equipment
Furthermore if there is a mutual obligation in that there is an on-going obligation to offer work on a regular and continuing basis by the contractor to the individual and there is an obligation for the individual to accept, carry out and perform all the work offered then the individual is highly likely to be an EMPLOYEE.
An individual is regarded as a self employed subcontractor if, under the contract, he is under a duty to the contractor to carry out the operations, or to furnish his own labour and some or all of the below apply:
- No Timesheet
- Minimal control by the Contractor
- A substitute may be sent in an individual’s place
- The individual is paid on completion of work
- The individual provides and pays for his own tools
Once you have determined if the individual is a true subcontractor, you then have to check their status with HM Revenue and Customs by verifying their personal details and UTR number. HM Revenue and Customs will then confirm how you should tax the subcontractor.
All of this can take time that might be better used running your business. Add on to this the risks of getting it wrong and incurring penalties and it makes outsourcing your CIS returns to us an easy decision.
Let us prepare your subcontractor returns – we will provide the subcontractors with statements each time they carry out work for you and we will submit your electronic returns to HM Revenue and Customs by the 19th of the following month. Saving you time, hassle and money and giving you peace of mind.
For more information contact Julie Mason on Julie.firstname.lastname@example.org or 01254 604311