Tax Investigation Helpline

Why HMRC Investigates CIS CIS investigations are often triggered when HMRC believes tax has been underpaid, or when there are irregularities in how deductions have been reported. Common triggers include:

• Contractors failing to verify subcontractors with HMRC.
• Incorrect deductions made from subcontractor payments.
• Inaccurate or late monthly CIS returns.
• Subcontractors wrongly treated as self-employed instead of employees.
• Discrepancies between CIS filings and other HMRC records.

Given the size of the construction industry and the potential for tax loss, HMRC devotes significant resources to monitoring CIS compliance.

What’s at Risk in a CIS Investigation If HMRC identifies errors in your CIS compliance, the consequences can be severe:

• Backdated tax liabilities, often covering several years.
• Penalties and interest charges on underpaid tax.
• Reclassification of subcontractors, leading to further liabilities for PAYE and National Insurance.
• Cashflow disruption, particularly where HMRC reclaims tax refunds already received.
• In the worst cases, criminal proceedings for deliberate non-compliance.

Even if errors were unintentional, HMRC can still impose penalties unless you can show that reasonable care was taken.

How We Help

At Tax Investigation Helpline, we understand the specific challenges of CIS investigations. Our team provides:

• Immediate clarity: We explain HMRC’s correspondence and outline exactly what’s required.
• Direct representation: We deal with HMRC on your behalf, ensuring you don’t say or provide anything that could harm your case.
• Thorough review of CIS records: We examine your returns, payment records, and subcontractor arrangements to identify potential issues.
• Negotiation and settlement: Where mistakes exist, we work to minimise penalties and arrange manageable repayment terms.
• Defence against HMRC overreach: If HMRC misapplies the rules or makes excessive demands, we challenge them robustly.

Our aim is always to resolve matters quickly and with minimal disruption to your business.

Common CIS Issues We See From our experience, frequent causes of CIS investigations include:

• Not verifying subcontractors before paying them.
• Deduction errors, such as taking the wrong percentage.
• Failure to submit monthly returns on time.
• Treating workers as subcontractors when they should be employees.
• Record-keeping failures.

By recognising these issues early, we can anticipate HMRC’s arguments and prepare a strong defence.

Don’t Face HMRC Alone CIS rules are complex, and HMRC investigators are highly trained to spot non-compliance. Trying to manage an investigation yourself can result in higher liabilities, unnecessary penalties, and prolonged stress.

We’ve helped countless contractors and subcontractors successfully navigate CIS investigations, often reducing liabilities and resolving disputes faster than if the case is left to run unchecked.