Having specialised in CIS payments for 20+ years, we know the common pitfalls and issues that would prompt an HMRC investigation.

There are four common pitfalls you should be aware of. We recently wrote about the problems caused by lack of accountability and using hourly rate as an indicator. Another common pitfall, however, is improper working practices.

Construction is a reactive industry where it’s common for end hirers to demand workers at short notice. This means staffing businesses must, understandably, find the fastest way to recruit the right people.

Because CIS is attractive to workers it can ease the task of sourcing workers and enable your agency to place them more quickly.

Consultants must understand that non-compliant workarounds can place your agency at risk. The most common issues relate to job titles assigned to workers of lower-skilled roles. If the job title implies the worker has autonomy and is not subject to SDC when their working practices in practice are subject to SDC, then your agency would be placed at risk if the worker was allowed to operate through CIS.

A job title of ‘skilled operative’ instead of ‘labourer’ for example, this would imply the worker is not subject to SDC. If, however, their actual role is more akin to ‘labourer’ then they would be subject to SDC and therefore not suitable for CIS.

Whilst systems and processes are in place to show sufficient due diligence, issues arise when there is discrepancy about job titles and roles in the supply chain. This subjects your agency to unnecessary risk in the event of an audit.

What to do

Train your consultants and set in place rules and safeguards to prevent workarounds from occurring. This is something we can support you with. Ensure you undertake regular internal audits. A good payments provider like Crest Plus will advise your team in detail about any aspects that may cause you a compliance headache.

Get a FREE CIS Healthcheck

We recently launched a new FREE CIS Healthcheck service to help recruitment businesses use the scheme safely.

The healthcheck will give you and your team the assurance you need to know you are operating in compliance with HMRC’s rules.

It’s a detailed audit and results in a report and recommendations on areas of strength and weakness, enabling the organisation to address any areas of concern.

Furthermore, it enables you to demonstrate due diligence in managing supply chains which is a critical component required by HMRC.

There is no charge for the healthcheck service and you can opt for it to be undertaken by a Crest Plus CIS expert or by our independent Chartered Accountant who is also a specialist in CIS.

Book a Crest Plus CIS healthcheck or contact us find out more.