Tax and CIS
CIS, the reverse charge,
CIS, the reverse charge,
and what HMRC expects.
Seven articles on the two tax regimes that touch almost every construction payment made in the UK, and the deadlines that carry an automatic penalty when they slip.
7 articles
Tax and CIS, in one place.
CIS and the VAT domestic reverse charge are separate rules that apply to the same invoice, and firms routinely get one right and the other wrong. CIS decides how much of the labour element you hand to HMRC instead of to the subcontractor. The reverse charge decides which of you accounts for the VAT, and it turns off only when the customer confirms in writing that they are an end user.
Both carry deadlines rather than judgement calls, which is what makes them worth reading about once and then automating. The CIS deduction calculator handles the arithmetic on a single payment.
Getting gross payment status, and keeping itThree tests, and the one that catches firms out is the compliance test, which now looks at VAT as well. What qualifying takes, and what a single late return costs you.Read it →
Verifying a subcontractor with HMRCThe step that decides the rate you deduct at, and the one firms do after paying rather than before. What verification returns, how long it lasts, and who carries the cost of getting it wrong.Read it →
What counts as construction work under CISThe included list is wider than most firms assume and the excluded list catches out exactly the trades that read it. Plus the mixed contract rule, which decides more cases than either list.Read it →
CIS monthly returns, the date and the penaltiesThe nineteenth, every month, whether or not you paid anybody. What the penalty ladder actually looks like, and the declaration on the return that carries more weight than the figures.Read it →
End user statements, and what they switch offIt has to be in writing, it comes from your customer rather than from you, and without it the reverse charge applies by default. What the statement says and where it belongs.Read it →The VAT reverse charge, and who accounts for the VATFive years in and it still catches firms out on every second invoice. When it applies, when it does not, the written statement that switches it off, and the wording your invoice has to carry.Read it →Reclaiming CIS deductions, and the money sitting with HMRCA limited company gets its deductions back through payroll rather than its Corporation Tax return, and only if somebody files the right submission every month.Read it →Other subjects
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