We have, over the last few months at EEBS (in conjunction with our tax advisors) completely overhauled our compliance policies and practices, to ensure that we keep you one step ahead of any potential problems. And whilst I know it’s not the most interesting thing to come out of lockdown this year (have you seen some of those videos!!) I thought I’d share some of the headline policies with you over the next couple of months, and, more importantly where we may have some mutual responsibilities.
So, I’ll start with our old favourite CIS, and its good news for a change!! Having revisited our engagement procedures and processes for both new and established clients the view of our advisors is that our SDC (supervision, direction and control) system remains (fanfare here!!) the most comprehensive solution available to the whole of the construction industry!
And the inside view is that HMRC currently lack much appetite to start an argument with clients engaging their sub-contractors through EEBs, not least because of the subjective nature of the questions it raises, but principally because of the comprehensive procedures that we have in place!
VAT Reverse Charge Scheme
Unfortunately, HMRC’s reticence to get involved does not run to VAT! The VAT Reverse Charge Scheme will go ahead for the construction industry in March 2021 come what may, and I understand the reason for the implementation of the scheme is very simple: Across the economy at large 4% of due VAT goes missing – it is unpaid by companies that go bust, Directors simply disappear with the VAT, companies deliberately under report the VAT owed etc etc. That figure for the construction industry is a much more significant 14%!!
Zero Rated Supplies
HMRC’s current attention to VAT also extends to Zero rated supplies in the construction industry and simply put, if you are a supplier in a Zero-rated supply chain it is up to you to hold proof that the zero rating is legitimate – relying on a “self-billing” invoice from a main contractor is simply not enough!
You will need to hold details of the planning application, and if it’s a mixed residential and commercial development you will also need proof that the supply is solely within the domestic new build provisions of the development.
If you need helpful advice regarding your CIS payroll arrangements get in touch with our friendly team for a compliance health check or call 01245 493832.