HM Revenue & Customs (HMRC) has launched its latest Construction Industry Scheme (CIS) Repayment Pilot and written to approximately 860 agents.
A Construction Industry Scheme Good Practice Guide is enclosed with each letter. The Guide is repeated word for word below:
The following guidance has been compiled to give agents a brief general outline of guidance that is available on the HMRC website. The guidance refers to clients in the Construction Industry in particular but the principles apply to Returns for any client.
It is for guidance only and is issued without prejudice to any enquiry which may be made by an individual officer of HMRC into any Return. You will need to apply the guidance on a client by client basis by reference to individual circumstances of each client.
It is important that your clients keep up to date records of income and expenditure. Guidance is provided on the HMRC website to help you support your clients’ record keeping processes:
For Construction Industry Scheme (CIS) subcontractors, CIS pay and deduction statements should be retained. It is good practice for clients to keep a simple diary (weekly/monthly) showing where they worked, for whom and the amount paid and tax deducted as well as the CIS pay and deduction statements so you can reconcile them at the year end.
Establishing income and claiming expenses
The Business Income Manual is a guidance manual written primarily for HMRC staff. However, it provides supplementary guidance on how to check tax calculations or work out the trading profits of a business for a Self Assessment tax return. It includes details on allowable expenses including
- Establishing Income – BIM30000 onwards
- Travel Expenses including Motor and public transport costs – BIM37600 onwards
- Cost of temporary accommodation – BIM37665
- Cost of subsistence with overnight accommodation – BIM37670
- Cost of food during the day – BIM37920
- Use of Home – BIM37665, BIM47815, BIM47825, BIM66215
- Wife or civil partner’s wages – BIM37735
- Cost of Tools – BIM46935
- Protective/Specialist Clothing – BIM37910
- Phone Costs – BIM37600
Support for Agents
Pre-Return Toolkits provide guidance on areas of error that HMRC frequently see in returns. Toolkits set out the steps that you can take to reduce those errors.
CIS Top Ten Tips
Some of the agents included within this pilot will be asked to participate in an educational visit from an HMRC Agent Support Officer (ASO) who will seek feedback on the good practice guide and offer further guidance.
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax and VAT Consultancy Team.
- CIS Repayment Claims for Companies – Top 10 tips (abbeytaxblog.co.uk)
- HMRC begins CIS Repayment Pilot; 860 agents targeted (abbeytaxblog.co.uk)
- HMRC High Volume Agent activity – 2012/13 (abbeytaxblog.co.uk)
- HMRC High Volume Agent activity – 2011/12 (abbeytaxblog.co.uk)