M+A Partners HomeBlogHMRC Campaign - Construction Industry Scheme Deductions for Subcontractors

HM Revenue & Customs (HMRC) has launched a new One to Many letters campaign (where a standard message goes to many customers) aimed at Construction Industry Scheme (CIS) contractors.

The purpose of the letters is to ensure contractors are making the right CIS deductions from subcontractors’ payments – prompted by HMRC records showing incorrect CIS tax deductions.

Contractors receiving one of these letters must respond to HMRC within 45 days, they can do this by either

If no action is taken, HMRC may undertake a compliance check which could result in penalties being due.

Verifying subcontractors

The letter is a reminder that to ensure compliance with CIS returns, contractors must

  • Verify all new subcontractors before they are paid;
  • Verify subcontractors that have been used before, if they haven’t been included on a CIS return in the current or last 2 tax years; and
  • Make sure the correct CIS deductions are applied.

How M+A Partners can help

The Construction Industry Scheme can be a complicated area of legislation, and there are many elements to consider, including registering for the scheme, monthly returns, mixed contracts, and the employment status of workers.

For any help in interpreting the requirements of CIS and your tax obligations, please either get in touch with your usual M+A Partners contact or email enquiries@mapartners.co.uk.

Our Expert

Sam Holloway
Senior Tax Manager
BIO
Sam joined M+A Partners in July 2008 after obtaining a degree in accounting and finance at the University of East Anglia.

Sam has since gone on to qualify as a Chartered Tax Adviser and is now one of our Senior Tax Managers. He is able to give specialist advice in matters concerning corporation tax, income tax, capital gains tax and stamp duty land tax. His current clients include individuals, companies, partnerships and sole traders with a focus on tax planning.

As a landlord, Sam has a keen interest in property related businesses whether held personally, in a partnership or in a corporate structure and advises many of our clients with property income.

Sam takes a straight talking approach to the advice he gives, getting to the point, and he likes to stay in contact with his clients regularly. He says: ‘Emails and letters are a great way to stay in contact, but sometimes it is about picking up the phone and speaking to your clients to get an understanding of how they are getting on, what challenges they are facing and how tax is impacting their business’.
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