HMRC issued updated guidance on the Construction Industry Scheme in November 2018.
CIS 340 explained the duties of contractors and sub-contractors within the scheme and that non-resident companies dealing with UK land must register for UK corporation tax.
It says that if a company, no matter where it is based, is developing, trading or dealing with land in the UK, then its profits must be taxed by the UK and therefore register with HMRC.
HMRC also recently published a reminder to contractors about the submission of monthly returns.
Every month, contractors must send HMRC a complete return of payments made to sub-contractors within CIS in the preceding tax month and this return must reach HMRC within 14 days of the end of the tax month it relates to.
It also reminds contractors that if they know they aren’t paying sub-contractors for several months they should inform HMRC. Contractors can do this by selecting the inactivity request box in the declarations section of the tax return. HMRC will then make the contractor CIS record ‘inactive’ for six months.
If you stop using sub-contractors completely within the construction industry scheme, or stop using sub-contractors but have employees under the PAYE scheme, you again need to inform HMRC, who will update your records to reflect that you are no longer a contractor. If this changes and you again start using sub-contractors under the CIS, you will have to inform HMRC once more.
Of course, if you are using Indigo CIS then all of this is taken care of as our expert team is on hand to continually keep on top of updates and developments within the Construction Industry Scheme.
We are always here to help with any questions or queries, and you can get in touch with us here.