You are probably aware that the new rules for the CIS changed on 1 April, 2007. For any construction company it is critical to adhere to the rules of the CIS, for getting it wrong can be costly in terms of deductions and surcharges.
This will mean that:
¨ CIS Cards and Certificates will no longer be used,
¨ Subcontractors will still be paid net or gross of tax, but HMRC will specify which, as part of the verification process.
¨ There is also a higher rate tax deduction of 30%.
¨ Vouchers and Year End returns will no longer be required.
¨ The Monthly Return requires a declaration to be signed that states that the contractor has checked the employment status of each subcontractor.
¨ Failure to submit the Monthly Return on time will result in a penalty being charged, based on the number of subcontractors on the late return; this penalty repeats for each month that the return is late.
¨ If the return is received late, the contractor’s own gross status as a subcontractor may also be at risk.
One of the first things that needs to be reviewed is the employment status of subcontractors. If the information is incorrect this could potentially put contractor company at risk of penalty for each return submitted.
For more information on how you can ensure that your business is compliant with the 2007 CIS Legislation contact Microtrading now on 0121 784 0077 or e-mail info@microtrading.co.uk with your details and we will contact you.