Late invoices, deposits, stage payments, CIS and the VAT reverse charge: getting the money into the bank.
Construction is the worst sector in the country for late payment, and the rules split in two depending on who owes you. A homeowner and a main contractor are different problems, and the interest you are allowed to charge is different too.
Deposits and stage payments before the work starts, chasing an overdue invoice once it has, the letter you send before taking it further, and the small claims route if it comes to that. Plus CIS deductions and the VAT reverse charge, which catch out most firms the first time.
A bill introduced on 14 October would make freeholders and others responsible for building safety fix unsafe cladding without delay, with fines of up to £500,000 for ignoring a Remediation Order. Contractors who have already paid for the work would get a simpler claim against the manufacturer.
Paying HMRC on time can still leave your return late. An empty month also needs reporting unless an exemption applies. Once a return is overdue, its penalty clock keeps running even as the next month comes round.
Your subcontractor says you should pay without deductions. HMRC's payment instruction decides. If they've worked for you before, your old monthly returns establish whether you need to verify them again.
A new public body, Great British Grid, and a plan to let more businesses build their own grid connections instead of queuing for the network company. Useful one day, if your kind of job qualifies. Nobody has said which jobs do, or when.
The reference at the top is yours. The UTR is theirs. The statement needs to show what you paid and withheld, with the optional boxes kept separate from the required details.
Your materials and labour split needs the subcontractor's direct costs behind it. Their markup stays in the CIS base, along with expenses you might never pay into their bank account.
Being inside CIS does not automatically mean reverse charging VAT. The flowchart follows HMRC's five tests, with written customer notification controlling the final one.
Being paid under CIS does not register you to pay your own subcontractors. Your role follows each contract. If you already employ staff, adding the contractor side changes your existing PAYE scheme.
Paying subcontractors puts the CIS deduction, return and paper trail on your business. That applies to your subcontractor payments even on a job in someone's kitchen, and even when another contractor is making deductions from your own invoices.
Construction payments or CIS credits linked to a connected party's deliberate non-compliance can expose your business to a penalty if you knew or should have known of the link and HMRC has issued the relevant determination. Company officers can also be personally liable.
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