If you do not need to check a subcontractor if you have included them in a previous CIS return. HMRC will notify you when they change the payment status of a subcontractor. You must register with CIS before hiring your first subcontractor. You also need to consider whether you should treat the subcontractor like an employee. HMRC has status guidelines. You will also need to review the subcontractors you have already used if you have not included them in a CIS statement during the current tax year or the last 2 taxation years. The verification number, which is your proof that you have deducted the correct amount of tax. You will receive the same verification number if you check multiple subcontractors at the same time. As a contractor, it is your responsibility to review any subcontractor working for you BEFORE paying for them. When you check a subcontractor with HMRC, you will be informed whether the CIS (Construction Industry Scheme) deductions must be made in the amount of 20%, 30% or whether the subcontractor can be paid gross (i.e. the total amount of the invoice without CIS deductions). The subcontractor must provide the prime contractor with a copy of its Maintain Company page of E-Verify to prove that it is registered with E-Verify.

The prime contractor should provide its subcontractors with general monitoring to ensure that they comply with their contractual requirements, which may include the registration and use of E-Verify. If you are a contractor and a subcontractor, you must register as both. If a4c operates your CIS program, we may review new subcontractors on your behalf. If you process your own CIS returns, you can check the subcontractors yourself via your HMRC government gateway or via your CIS software. If they have not yet registered with HMRC as a subcontractor, they must do so before they can be verified and before you can pay them. To verify a subcontractor, you www.gov.uk/what-you-must-do-as-a-cis-subcontractor/how-to-register need to gather the following information: If you want to discuss any aspect of the system or need help with the verification process and tax deductions, our team of experienced accountants for small businesses knows cis and will be happy to help you. For more information, please contact us on 0207 043 4000 or info@accountsandlegal.co.uk. The verification number is usually in V format, followed by 10 numbers, e.B.

V123456789. If HMRC cannot verify that the subcontractor is registered, it will indicate another type of reference number. If you check multiple subcontractors at the same time, HMRC will provide the same verification number. In this article, we explain the process of verifying the tax status of a subcontractor as well as a brief summary of the regime, which is discussed in more detail here. You will need the following information about the subcontractor: When HMRC verifies a subcontractor, it will tell you how to pay for it. It could be: The E-Verify Federal Contractor Rule requires that some federal prime contractors require their subcontractors to use E-Verify if: Before a payment is made by a contractor, it must perform an audit of the CIS subcontractor. This then determines the correct amount of tax to be deducted. How can I perform the cis subcontractor audit and when should I perform it? Once the verification process is complete, you will be required to submit monthly returns and keep complete CIS records. HMRC will check if the subcontractor is registered, tell you how to pay for it and give you a verification reference number.

You will receive a slightly different type of reference number if HMRC is not able to verify the subcontractors registered with them. It is important that you take note of this. It is important to keep the exam up to date, as the subcontractor`s tax deduction rate may change. HMRC will only notify contractors and subcontractors when the review is up to date. If your verification is up to date, you can continue to pay and deduct taxes at the rate recommended by HMRC when you have provided the current verification number. Before checking a subcontractor, it is important to make sure that the contract does not concern the job. If the contract is an “employment contract”, then they are an employee and not pay in CIS. Tip: Some software can perform verification of ciS subcontractors without a social security number. We always recommend that you get this information, but it`s not always important. Under HMRC rules, it is mandatory that a new subcontractor be checked before working for you.

However, you may already have subcontractors working for you. Use these tools to learn more about hiring subcontractors or “independent contractors” and avoid prime contractor liability. This is a brief overview of the steps you need to take to verify subcontractors and comply with CIS. Once all your subcontractors have been verified, pay them. Simply deduct CIS (at the rate confirmed by HMRC, 20% or 30%) from the work element of your invoices, for example: if the subcontractor changes its status from 20% to 0% tax or vice versa, HMRC will inform both the contractor and the subcontractor of the change. HMRC will only notify contractors who have an up-to-date review. Tip: Entrepreneurs usually know which rate HMRC will say to deduct. If a different rate is displayed in the verification process, we recommend that the contractor inform the subcontractor before payment is made.

It may simply be that the wrong UTR or other information has been provided, which, if this happens, simply completes the verification process again. It is the subcontractor`s responsibility to contact HMRC if it considers that the wrong CIS tax is deducted. The Contractor must deduct the CIS tax rate that HMRC is required to deduct as part of the CIS Subcontractor Review. When you pay a subcontractor, you must “check” it with HMRC to check if it is registered under CIS and what payment status it has. Subcontractors can be verified through HMRC`s CIS online services or through HMRC`s CIS helpline. To complete the CIS subcontractor verification process, you must provide HMRC with the following details about the subcontractor: Verification is the verification process that your subcontractor has registered under CIS and what their payment status is. If you have used a subcontractor in the last two years, you do not need to rehearse it. However, the HMRC CIS website will notify you if the cheque is outdated.

You will then need to perform and submit a new cis subcontractor verification to ensure that none of the subcontractor`s information has changed. If you need to audit more than 50 subcontractors, you must use commercial CIS software. You can submit monthly returns through the CIS online service and you can also use the website to review your list of subcontractors, view previously submitted returns, and update any details you need to change. If you are a contractor hiring a subcontractor, be sure to complete a follow-up request for people with active coverage. If the subcontractor does not pay workers` compensation bonuses or does not renew their contractor registration, or if their electrician or plumber`s license is suspended or revoked within one year of the request, L&I will send you a notification letter. The Construction Industry Programme (CIS) is managed by HM Revenue & Customs (HMRC). It regulates contractors` payments to subcontractors in the construction industry. If you are a contractor in the construction industry, you should be aware of your obligations under the government`s Construction Industry Program (CIS). .