HMRC campaign letters to contractors

Warning letters are being issued about CIS deductions

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HMRC has provided the following update to ACCA about a CIS campaign letter being issued to contractors under the CIS scheme to check and correct their CIS deductions from their subcontractors.

ACCA understands that the letters have already been started to be issued since the week commencing 22 July. The prompts concern the Construction Industry Scheme (CIS) and require contractors to ensure that the correct tax deductions are made from payments to subcontractors.

The primary aim of the campaign is to prompt contractors to make the correct CIS tax deductions by verifying the CIS tax status of their subcontractors and subsequently ensure they are applying the correct CIS tax deductions on all payments being made.

The letter advises recipients that HMRC records show that some contractors have made incorrect CIS tax deductions, requests contractors to verify their subcontractors and sets out the steps for doing so (including signposting to appropriate guidance) to help them get their deductions right.

An example of the letter can be seen below.