HMRC One to Many Agent Letter – Incorrect CIS Tax Deductions (verifying subcontractors)

HMRC have advised us that they have recently commenced a One to Many (OTM) letter campaign directed at Construction Industry Scheme (CIS) contractors to prompt them 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 sending process commenced during the week beginning 22 July 2024 and will continue over the coming weeks. A copy of the letter is provided below.

The letter advises recipients that HMRC’s 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. The letter also explains that if no action is taken HMRC may commence a compliance check.

HMRC OTM - Make sure you’re making the right CIS deductions from subcontractors’ payments