Your first step is to register as a contractor. You can do this through the government’s website and need to register prior to starting any construction. Once you’ve completed the process, HMRC will send you a letter with the information you need to begin work as a CIS contractor.
Once you’ve completed that process, HMRC will send you a letter with the information you need to begin work as a CIS contractor.
As a contractor you need to confirm each subbie’s employment status. This is determined by the service they will be providing, so you need to fully understand the work to be undertaken and the terms of engagement.
You need to verify every subbie with HMRC before you can make any payments. HMRC will confirm the subbie is registered with CIS, and the rate of deduction you need to use.
Any subbie you’ve used in the current or last two tax years must also be verified if you haven’t included them in a CIS return.
You can use the free online CIS service from HMRC or a commercial CIS software packages. Make sure you have your:
You’ll also need your subbie’s:
If you have several subbies to verify, you can use the government’s Electronic Data Interchange (EDI) system.
You can use HMRC’s online Employee Status Indicator to check a status for tax purposes. However be aware this tool is only an indication and is not definite. If HMRC rule the status is wrong you cannot use this in your defence.
You can check out your potential liability for getting it wrong here.
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