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5 Min read – By Nicholas Brown.

It’s bad enough having to pay tax, let alone being forced to pay it twice!!

C.I.S deduction statements

C.I.S. deduction statements play a pivotal role in the construction industry, serving as crucial evidence that contractors have deducted tax from subcontractors’ payments.

When submitting a tax return, subcontractors are required to declare any amounts of tax deducted from their earnings by a C.I.S Contractor.

HMRC then cross-references this information with the amounts reported and paid by the contractors on the subcontractors’ behalf.

In recent times, the implementation of more diligent HMRC procedures, coupled with advancements in AI and automation, has led to an increase in the detection of mismatches between declared tax amounts by the subcontractor and payments made and reported by the contractor.

Consequences of an error, mismatch or discrepancy.

The consequences of such discrepancies can be severe, resulting in HMRC compliance checks and significant delays in tax returns and repayments.

As part of HMRC compliance checks, the first documents requested are often the C.I.S deduction statements, closely followed by invoices.

Failure to provide these documents matching the amounts declared on the tax return can lead to any shortfall in tax reported compared to tax “paid” liable to be due to HMRC.

Unfortunately, in the U.K, you, the individual, are always solely liable for any tax due.

Even if it is a result of an error, you are liable for making any contributions deemed due by HMRC.

“Mistakes” are becoming more and more common.

Throughout the course of this year, we have observed more and more errors made by C.I.S Contractors when it comes to reporting and paying amounts due to HMRC.

In challenging economic times, businesses may prioritize other expenses instead of paying for a professional to run the payroll or settle HMRC bills, leading to potential errors in reporting or delays in tax payments.

This can quickly spiral out of control for subcontractors, especially if the business they worked for fails to pay the deducted tax to HMRC.

Most error-prone are companies such as:

  • Stagg Fencing
  • Barrington Energy Solutions
  • DSG Civils
  • Crossways Gardening & Supplies
  • J A Evans
  • Labournconstruction
  • Clearpath Ltd

So how to protect yourself against such

To protect yourself as a subcontractor, we recommend having a service agreement signed by both parties before commencing work. Ensure that your invoices include any tax deductions due and promptly receive CIS deduction statements by the 19th of each month following a tax deduction.

Can NJB Taxback Help?

At NJB Taxback, we are committed to supporting subcontractors in managing their tax affairs efficiently and compliantly.

We offer a free service agreement and invoice template to help you safeguard your business against potential HMRC discrepancies. For assistance and expert advice, contact us at 02038220201.

Of course, Just get in touch via any of these methods, and we will be happy to assist.

The NJB Taxback App

Download the free NJB TAXBACK App now to get started, and use our free rebate calculator to check if you are due a tax refund, or book a call with one of our experts to get started.

All of our clients already have a preloaded NJB TAXBACK App account.

Select log in from the options along the bottom and follow the reset password method to sign in.

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NJB Taxback has helped to save its clients £10 million in tax over the last four financial years.

NJB Taxback offers a revolutionary one-stop solution to filing your self-assessment tax return guaranteed against HMRC investigation.

The NJB Taxback service combines the expertise of a qualified, friendly team with a free App to supercharge the process of completing your end-of-year tax return.

The NJB Taxback Trustpilot reviews speak for themselves.

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NJB Taxback Ltd

Kemp House
124 City Road