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Cis

Gross Payment status

It is the first time when I am dealing with a client who has an LTD, he works in constructions BUT he has Gross Payment status. My questions for you is: when he pays his subcontractors, he still needs to deduct 20% or 30% Cis taxes, depending on the verification results... and he must report the Cis deducted monthly through CIS submissions. Right? Still same rules applies for Cis submissions (like for the others who do not have Gross status) and monthly payments for HMRC regarding subcontractor`s payments have same 19th deadline? I am a little bit confused, they have small amounts previously submitted for the PAYE/CIS.. and that`s impossible ... since they pay montly at least 10 subcontractors. Thank you. 

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05th Dec 2018 11:37

He will have to apply the 20% or the 30% to those subcontractors who do not hold gross status. He will have to do monthly returns and pay over any CIS deducted.

Cannot comment on previous payments.

Thanks (1)
By Gia17
to Peter Kilvington
05th Dec 2018 11:42

Thank you very much Peter!
Well.. whatever was previously submitted is a nightmare... the director took 2000 as a salary/monthly without declaring the salary on FPS ... all subcontractors have been paid in full without CIS deductions and all monthly payments haven`t been reported through CIS submissions.... Oh Lord!

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05th Dec 2018 11:49

The company's gross status has bu99er all to do with the tax it deducts from his subcontractors.

That will depends on the subcontractors' status.

The director's "salary/monthly" are easily dealt with. They're loans which will carry all the usual snags of possible interest BIK, s455 charges and, of course, he still owes the company the money.

Tell him to stop digging a deeper hole.

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By mike01
05th Dec 2018 11:53

You are correct.The same rules apply to all contractors regardless of tax status.
You must always verify all new subcontractors with HMRC and deduct tax at the rate instructed.Each month you file a return of payments made and tax deducted from those payments and this must be done by 19th of the month if you are to avoid the dreaded penalties!
Any tax deducted from payments made to the company prior to it obtaining gross payment status can be offset against ongoing PAYE liabilities.Your software will/should allow you to enter the monthly sums and this in turn will enable you to file the relevant EPS.

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05th Dec 2018 12:06

If CIS deductions have not been made but should have been made then there is a danger that the current Gross Status may be removed. Look up the legislation before you do anything else.

Here is a summary (This is not the legislation)
https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/annual-review

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By Gia17
05th Dec 2018 12:29

I thank you all! You are really supportive!

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