Six months to go before the new CIS
- Cards and certificates are being replaced by a 'verification' service to confirm whether subcontractors should be paid gross or net
- Instead of issuing vouchers, contractors will make monthly returns and issue pay statements
- The monthly return will include a declaration that the contractor has considered the status of the workers on the return and that none of them is an employee.
Contractors can get advice from a number of places: the HMRC website, the helpline on 0845 3667899, Employer Talk events, Business Advice Open Days and joint events with Scottish Building.
New CIS Programme Director, Mark de Brunner said: "Our website has easy-to-use tips on New CIS, including how to fill out monthly returns on paper and submit returns electronically. It lists a number of software providers who have updated their packages to support new CIS.
"There is also advice for contractors on how to confirm the employment status of their workers - whether they wish to do this online or over the phone.
"More in-depth advice is available at Business Support Team seminars, which are held throughout the country. Our website gives details on how to book a place on an event near you, or telephone 020 7667 4827."
Background
New CIS is designed to create a level playing field for those working in the sector. Under New CIS, the old registration cards and tax certificates of the current scheme will be phased out, and a new verification system will be introduced to ensure that when a contractor engages and pays a subcontractor, the contractor knows whether to pay the subcontractor in full or make a deduction from the payment. If the subcontractor is not registered, the contractor will be told to make deductions at a higher rate.
Contractors must also satisfy themselves that the terms of any contract they have with their subcontractors are those of self-employment. If contractors need help to make a decision on a subcontractor's employment status, they can call the CIS Helpline or use the Employment Status Indicator tool on the HMRC website.
Currently subcontractors hold a tax certificate or registration card, which are presented to contractors before any payments can be made. These documents indicate whether a subcontractor should be paid gross, or under deduction. For all payments, contractors also must submit vouchers on a monthly basis to HM Revenue & Customs. Contractors are also required to complete an end-of-year tax return.
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Susie Hughes © Hardhatter.com 2006
The Editor