Over 20 Years’ Experience

Subcontracting in the construction industry is not simply a choice, you need to assess every skilled worker who might fill any position you have.

Not knowing is not an excuse!

Sovereign Plus are experts in contractor and subcontractor compliance and have been protecting businesses from HMRC status enquiries and employment rights claims for over twenty years. We understand the complexities and intricacies of the Construction Industry Scheme and how much it can cost your business to get it wrong.

By engaging our services, we take on HMRC responsibilities for the individuals and apply our experience and knowledge of employment law and legislation. Our continued investment into keeping our contracts commercially robust and our clients fully compliant ultimately ensures you are protected from any status enquiries from HMRC.

IR35

New rules for IR35 were introduced in April 2021 – are you clued up on the new legislations?

IR35 is another name for the off-payroll working rules. It is designed to assess whether a contractor is a genuine contractor rather than a ‘disguised’ employee, for the purposes of paying tax.

• IR35 helps HMRC tackle tax avoidance through off-payroll working
• IR35 is essentially an employment status test for tax, which works out whether a contract points towards employment or self-employment
• IR35 is also known as the ‘intermediaries legislation’ because it applies to workers who provide their services through an intermediary, rather than working as an employee.

CIS

The scheme for self-employed contractors and sub-contractors working in the construction industry.

The Construction Industry Scheme (CIS) has seen a number of revisions over the years and it remains a time consuming and complicated process for all contractors large or small.

CIS covers most construction activity including permanent or temporary buildings and structures, roads, bridges and other civil engineering works. Construction work includes:

• Building work
• Demolition and dismantling
• Preparing the site, such as laying foundations and providing access works
• Installing heating, lighting, power, water and ventilation systems
• Alterations, repairs and decorating

Domestic Reverse Charge

The Domestic Reverse Charge (DRC) came into effect in the UK on 1 March 2021.

The DRC – also known as the VAT reverse charge for construction is effectively an extension of the Construction Industry Scheme (CIS) and applies only to transactions that are reported under CIS and are between VAT-registered contractors and sub-contractors. It applies only to VAT-registered businesses who are supplying/receiving services that are reported under CIS

The DRC doesn’t apply to sub-contractors unless the answer to all of the following questions is positive:

• Are any of the supplies you are making within the scope of the CIS?
• Is the supply standard or reduced-rated?
• Is your customer VAT registered?
• Will your payment be reported under CIS?
• Are you sure the customer is not an end user?

Self Assessment Tax Returns

When you’re registered with CIS, you’re responsible for paying the correct tax and National Insurance.

The Construction Industry Scheme (CIS) requires the submission of an annual Self-Assessment tax return, including details of income and expenses, and the amount of tax deducted under the CIS.

Sovereign Plus automatically sends all subcontractors a monthly CIS statement along with their full CIS deduction breakdown statements for the tax year after 5th April. This is just one of the many benefits of working with Sovereign.

Our team of accountants can offer self-assessment services to all our subcontractors.