What
about subcontractors?
There
will be transitional rules for subcontractors currently within
CIS. A subcontractor under the existing CIS may not need to
register under the new CIS if they have:
- a
tax certificate (CIS5 or 6)
- a
permanent registration card (CIS4(P))
- a
temporary registration card (CIS4(T)) that has not expired.
However,
if a subcontractor first starts working in the construction
industry on a self-employed basis after 5 April 2007, or had
a temporary registration card that has expired, they will
need to register for the new CIS.
To register, a subcontractor will need to contact the Revenue
by phone or over the internet and they will conduct identity
checks. The rules for subcontractors to be paid gross are
broadly equivalent to the current rules. There will be a business
test, a turnover test and a compliance test similar to the
existing regime.
Subcontractors not registered with the Revenue will suffer
the higher rate deduction from any payments made to them by
contractors.
We
would welcome a call or email if you have any questions on
anything we have covered in this newsletter.
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activities by the Institute of Chartered Accountants in England
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