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.
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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.
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?
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.