Overview
By engaging our services, we take on HMRC responsibilities for the individuals and apply our experience and knowledge of employment law and legislation.
BUILT AROUND THE REGULATIONS THAT MATTER
HMRC CIS IR35. Right to Work Employment Law DRC VAT
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?