General information only, not advice for your circumstances. Please talk to us before acting.
Under the Construction Industry Scheme, contractors deduct tax from payments to subcontractors and report them to HMRC every month. Monthly returns are due by the 19th of the month following the tax month ending on the 5th.
Common errors
- Using the wrong deduction rate: 20% for registered subcontractors, 30% for unregistered, and nil for those with gross payment status
- Deducting tax from the cost of materials, which should be excluded
- Including VAT in the gross payment figure
- Not verifying a new subcontractor with HMRC before paying them
- Filing late, which brings automatic penalties
VAT reverse charge
Many construction services are also subject to the VAT domestic reverse charge, where the customer accounts for the VAT instead of the supplier. Getting this wrong can cause problems on both sides.
Our bureau prepares monthly CIS returns, statements and VAT returns for contractors, so you can concentrate on the work.
