Construction
industry scheme new CIS
HM Revenue & Customs - New CIS starts in two weeks
With the new Construction Industry Scheme (New CIS) going
live in two weeks' time, contractors are being urged by HM
Revenue & Customs (HMRC) to make sure that they can hit the
ground running.
The new scheme – which starts on 6 April – is being introduced
to make life easier for customers and ensure a level playing
field for all.
By removing the need for subcontractors’ old tax certificates
and registration cards, HMRC has simplified the process for
contractors and subcontractors.
From April, registration cards and tax certificates will no
longer be valid, and will be replaced with a verification
service. Contractors will be able to verify with HMRC whether
the person or firm they are engaging is registered as a
subcontractor, and whether the subcontractor should be paid
gross or have money deducted, by going online or phoning the
Department.
There are a number of steps contractors need to undertake before
entering into a working arrangement with a subcontractor.
Contractors must:
• establish the subcontractor’s employment status;
• check whether the subcontractor is on the list HMRC sent them
in March, of subcontractors they don’t need to verify, then
verify subcontractors not on that list to find out whether the
payment to the subcontractor should be made gross, or should
have a deduction made at the standard rate of 20 per cent or the
higher rate of 30 per cent; and
• start sending HMRC a monthly return with all the details
required about their subcontractors' payments and deductions,
where appropriate, as well as confirmation that they have
checked their subcontractors’ employment status. The first
monthly return needs to be with HMRC by 19 May.
New CIS Programme Director, Mark de Brunner, said:
“With only two weeks to go, the construction industry needs
to make its final preparations, so that it is up and running by
6 April.
“There is a lot of help available if contractors need it –
online and over the phone.”
The latest ‘New CIS Update’, which is being sent to all
contractors from next week, covers all the main elements of the
new scheme. There is also a handy ‘Contractor's timetable’ which
lists all the important CIS dates, and reminds contractors of
the key deadlines.
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