Payroll unit for construction companies

March 2007

Prime Chartered Accountants have set up a special payroll unit to help construction companies deal with the new tax laws for building workers.

Prime’s payroll wing Paysolve has launched an advice line and special unit for when the new Construction Industry Scheme (CIS) legislation takes effect from April 6 2007.

The Government has been concerned for some time about the number of sub-contracted building workers who avoid paying tax and hope the new legislation will ensure that subcontracted labour will be more easily identified as being ‘employed’ or ‘self employed’.

Prime Chartered Accountants chairman Laurence Moore said: “However, the new scheme will mean many additional compliance and administrative burdens for the contractors to cope with. These will be very time-consuming and difficult and so we have set up a special CIS unit to help, including a telephone help-line service to existing clients.

“We can also advise any other construction companies on their obligations and put in place the relevant payroll systems and procedures to meet Revenue’s requirements.”

Small companies struggling

Monima Das, who heads the payroll section, Paysolve, said: “Many smaller construction companies are still struggling to prepare for the changes being introduced and need help to make sure they will comply with the new rules and meet the reporting requirements of the Revenue.”

To ensure that subcontractors pay their full tax and national insurance obligations, all new subcontractors will have to be verified, which means that certain specific information has to be obtained from the subcontractor and checked with the Revenue.

For contractors, the new legislation will mean a lot of extra work. For example, at least once a month they will have to issue summaries to the subcontractors detailing the amounts paid and tax deducted; submit monthly returns to the Revenue; and confirm to the Revenue that the subcontractors that are shown on the monthly returns are self-employed and not employees. These rules are all backed with automatic penalties.

Tom Duggins, whose company TD Kitchens & Bathrooms in Coventry is using the Paysolve payroll  unit, said: “I am pleased that the Revenue intends to create a level playing field for all by tackling the issue of employment status. It has always been unacceptable that firms who categorise their workers properly are undercut and threatened by contractors who blatantly flout the rules to gain an advantage in their labour costs.”

Prime’s specialist CIS payroll unit can be reached on 024 7655 4321 or send them an enquiry here.

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Payroll for construction companies