Under the scheme
there are no Cards, Tax Certificates or Vouchers.
provide the Contractor with their Date of Birth, Unique Taxpayer
Reference and National Insurance Number.
should be issued with their Unique Tax Reference by the H
M Revenue & Customs.
need to register with the H M Revenue & Customs either
by phone, internet or in person. If they are are unknown to
the H M Revenue & Customs then they will have to go to
a revenue office for an identity check. They will need to
take two forms of ID with them. Each month the Contractor
will hand to his Subcontractor a statement showing the amounts
paid to him for that month together with a note of any tax
deducted. The Subcontractor must keep this statement, as it
his record of tax paid on his behalf, and pass this on to
his Accountant in order for him to prepare his own Accounts.
first matter a Contractor must address is to determine whether
the Subcontractor is actually a Subcontractor or an Employee.
This is a gray area, as there is not one factor that determines
whether a person should be treated as employed or as self
employed, as there are many that need to be considered. The
H M Revenue & Customs may lead you to belive that, if
a Subcontractor works for only one Contractor or he does not
supply his own van or materials, he then must be an employee
and cannot be self employed. Do not be fooled by what you
hear from the H M Revenue & Customs because if they had
their way we ALL would be employed. YOU
MUST SEEK ADVICE ON THIS ISSUE.
Contractor must verify the Subcontractor with H M Revenue
& Customs. They will be given a verification Number and
be informed at what rate any deduction should be made. There
are three rates of deduction, Zero, 20% & 30%.
month the Contractor is required to complete and submit a
Return to H M Revenue & Customs within 14 days, giving
details of all payments made to subcontractors in that month.
This deadline is very important as any monthly returns submitted
late will incur an immediate penalty of £100 and rising
until the return is filed. These penalties are for any Contractor
and it applies even when there have been no payments made
to Subcontractors for the month.
when submitting the returns the Contractor must provide the
Subcontractor with a statement showing the tax deducted on
his behalf for that month.
Contractor does not submit annual returns as the monthly returns
will contain all the relevant information.