If you’re a member of the Construction Industry Scheme (CIS), it’s worth taking a moment to check your monthly returns. HMRC is due to send letters in October where errors have been identified, focusing on three common mistakes.
Using the wrong CIS deduction rate
When required, contractors need to complete checks to verify a subcontractor, and HMRC will confirm the deduction rate to use.
Because rates can change, always use the latest rate HMRC has notified you of, rather than relying on an old rate or one used on a previous return.
Not recording the cost of materials
If material costs are included on the invoice, remember to record them separately. CIS deductions usually apply to labour rather than materials, and keeping the figures separate helps the return match the client’s records.
Entering incorrect figures
Before submitting the return, it’s a good idea to check the payment, material and deduction figures against your payroll, invoice or accounting records.
HMRC will continue to check CIS returns and may ask clients to review their records and explain how the return was completed. They may get in touch by letter or email, so if you’d like to check that a message is genuine, use the link below.
https://www.gov.uk/government/collections/check-a-list-of-genuine-hmrc-contacts
If you need any help with CIS deductions or communicating with HMRC, please get in touch with a member of our team.
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The information provided in this blog is for general informational purposes only and should not be considered professional advice. As far as we are aware, the content is accurate at time of publication. Torgersens assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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