Christmas bonus

Subcontractors CIS

Didn't find your answer?

A client (Building contractor) has given all his subcontarctors a christmas bonus varying between £100 and £500, but not taken account of any CIS. I assume such payments are subject to CIS? If so, how do we rectify? Does the Jan return need to be re-submitted (was not aware of cash bonuses at that time) or can we include on next return which will be in April for wages up to 5 April 2020.

Replies (4)

Please login or register to join the discussion.

avatar
By Matrix
17th Mar 2020 16:28

Are you planning to gross them up and provide CIS certificates on that basis? You can resubmit I believe.

Although I think paying Xmas bonuses makes it hard to argue these aren’t employees.

Thanks (2)
Replying to Matrix:
RLI
By lionofludesch
18th Mar 2020 06:15

Matrix wrote:

Although I think paying Xmas bonuses makes it hard to argue these aren’t employees.

Agree with Matrix. I think the contractor has bigger problems than CIS. He doesn't pay holiday pay and sick pay as well, dies he?

Thanks (0)
avatar
By pauld
18th Mar 2020 10:15

I wonder what the ratio is of building firms whose brickies, builders etc are classed as employees rather that subcontractors? 1:100?

Although 'bonus' is associated with 'employee', why cant he give a Christmas bonus to a self employed person who is grateful for, for all their help? Hardly makes him an employee.

Thanks (0)
avatar
By cbp99
18th Mar 2020 12:25

Without knowing more, it's not obvious that the "bonuses" fall within the CIS. From CIS 340, para 2.15: "A payment is anything paid out by the contractor to the subcontractor under a contract for construction operations". I am guessing the payments are not contractual, nor it seems are they for actual construction work - more a sort of goodwill payment.
I agree it makes them look somewhat like employees, but the bonuses are only part of the story.

Thanks (0)