Late tax payments and the construction industry
Sub-contractors in the construction industry probably know that having a clean tax record is vital if they want to retain their gross payment status (the thing that stops them from having to pay a 20 per cent sub-contractor tax).
The good news is that HMRC have decided that applying to reschedule tax payments under the new Business Payment Support Scheme won’t affect a sub-contractor’s tax record. If, however, a sub-contractor doesn’t apply to use the scheme and they end up making a late tax payment, they will be affected.
HM Revenue and Customs still rely on an automated process when it comes to cancelling gross payment status, and altering the software is apparently too expensive.
So sub-contractors who have applied under the Business Payment Support Scheme may still get a standard letter telling them that their gross payment status has been cancelled, and this will have to be challenged in under 30 days.