Question 1

Will a subcontractor be penalised if CIS isn’t deducted?

Accepted Answer

Should you discover that a contractor has not deducted CIS from your payments as required, review your documents detailing payments received and communicate with the contractor for clarification.

If you have received a notice from HMRC of unpaid CIS deductions, review their calculation for accuracy: does it accurately reflect your earnings and the tax paid on CIS deductions made by the contractor?

Under CIS Regulation 9, HMRC may consider exemptions or reductions in CIS liability, particularly if the subcontractor has paid tax independently.

Subcontractors can appeal HMRC’s CIS deductions notice by providing evidence of their CIS liability.

Question 2

Can you fix CIS errors without HMRC penalties?

Accepted Answer

Use HMRC’s CIS online service to change or correct something on your CIS return. Depending on the nature of the error, this may mean you avoid a penalty or fine. If in doubt, you can contact the CIS helpline.

Question 3

Can you appeal fines and penalties?

Accepted Answer

If you disagree with a penalty, you can appeal within 30 days of the date on the penalty notice through HMRC’s online service, where you can also track the progress of your appeal.

Day: November 22, 2021

What happens if a contractor does not deduct CIS?

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