Construction Industry Scheme

The Construction Industry Scheme sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.

Non-compliance will have severe implications, including strict financial penalties.

Francis Clark Tax Consultancy can help you meet your obligations by:

Drafting contracts to ensure self employed status and reviewing existing contracts
Insurance to protect you against the costs of an HMRC investigation, including any tax, national insurance, interest and penalties charged by HMRC
Payroll services, including gross payment and deductions calculations, completion of monthly returns and production of payslips

You do not have to be a client of our practice in order to use our services. We are very experienced at working with other accountants and will happily provide these specialist services whilst your existing accountant continues with his usual work.

Contracts

We can draft a contract to reflect the terms and conditions which apply to the working relationship between you and your sub-contractors and provided that the terms and conditions of the contract which we draft are followed strictly in practice then this should ensure that HM Revenue & Customs (HMRC) will accept that your sub-contractors are self employed.

We can review any existing contract which is currently in place between you and your sub-contractors and either confirm that it should satisfy HMRC that your sub-contractors are genuinely self employed or alternatively we will suggest revisions to either the contract or alternatively to the working practices which exist between you and your sub-contractors again to ensure that HMRC will then accept that they are genuinely self employed.

Insurance

The likelihood that the tax authorities will investigate you or your business is stronger today than ever before.

Once we have drafted a contract for your use, or confirmed that we are happy with the contract which you have in place, we can arrange insurance which will cover you for:

Up to £50,000 of accountancy fees incurred in defending the self employed status of your sub-contractors from an attack by the HMRC.
Up to £50,000 per sub-contractor relating to tax, national insurance and penalties incurred as a result of a successful attack by HMRC on the self employed status of your sub-contractors.
Public liability insurance, personal accidence insurance and employers liability insurance for your sub-contractors – these are extremely important requirements if you are to succeed in a claim that your sub-contractors are self employed.

The cost of the insurance is in the region of £7 to £8 per sub-contractor per week relating to (a) and (b) combined and a further £3 to £4 per sub-contractor per week relating to (c). The insurance in (c) has to be charged to the sub-contractor as part of showing that he is taking on the type of risk which a self employed person would be expected to accept and the cost is tax deductible in the sub-contractors business accounts.

Payroll

We also operate a payroll service relating to CIS which consists of:

Running a CIS payroll which calculates the gross payment due to a sub-contractor, deductions to be made in respect of materials, tax deduction required and net payment to be made.
The completion of the new monthly return by the appropriate deadlines set by HMRC.
The production of the payslip which you are required by law to produce to every sub-contractor to whom a payment is made (severe penalties can be applied by HMRC should you fail to provide this pay statement to the sub-contractors).

In addition to these services we are very experienced in putting on seminars for contractors to assist them in understanding the extent of their obligations under the new CIS.

We also have considerable expertise in defending contractors from a status attack by HMRC, with two ex HMRC Inspectors forming part of our CIS team.

For further information please contact either Andrew Squires or Damian Lannon on 01803 400000.