First, you need to register as a contractor. This must be done prior to starting any construction and can be done through the government’s website.
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 subcontractor’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 will need to verify each subcontractor with HMRC before you can start paying them.
HMRC will then confirm if the subcontractor is registered with CIS and the rate of deduction you need to use.
Any subcontractor that 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 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 potentially liability for getting it wrong here.
Subcontractors can be verified through:
Make sure you have your:
You’ll also need your subcontractor’s:
If you have several subcontractors to verify at once, this can be done using the government’s Electronic Data Interchange (EDI) system.
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