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When is CIS material?
Key points
- The costs of materials can be deducted in calculating CIS withholding.
- Contractors must have checks in place to prove that the exclusions from CIS deductions is correct.
- Plant and scaffolding hire can be treated as materials if hired by the subcontractor from a third party.
- HMRC clarified that the subcontractor must pay for materials to obtain a CIS materials deduction.
- If subcontractor costs are over estimated the contractor may be liable for the CIS tax shortfall interest and penalties.
- Aside from the cost of materials other risk areas for building contractors include failure to register under the CIS or to submit monthly returns and the like.
It is Monday morning and all is well and then the post arrives. There it is that innocent letter from HMRC warning of an impending construction industry scheme (CIS) compliance review for a contractor client. Many readers...
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