Construction firms uniquely deal with a mixed workforce of highly mobile PAYE employees and specialist subcontractors. The Construction Industry Scheme (CIS) forces contractors to deduct money from subcontractors' payments and pass it to HMRC.
Verification is Key
The primary failure point in CIS payroll is subcontractor verification. Applying the wrong deduction rate (20%, 30%, or gross) because a worker wasn't properly verified creates an immediate tax liability for the contractor.
A robust payroll system must offer seamless HMRC integration for instant verification and automatic generation of professional payment and deduction statements.
