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If your business is registered as a subcontractor under the Construction Industry Scheme (CIS), you need to tell HM Revenue & Customs (HMRC) as soon as possible about certain changes in your business circumstances. HMRC may need to update their own records and, if necessary, make changes to your registration status.
It's particularly important to report any business structure/ownership changes to HMRC. If you don't it may affect how and what you are paid by your contractor.
If you're an agent for a CIS registered business you may need to report a change in business circumstances to HMRC on behalf of your client.
If you're also a contractor, please see the related guide 'Reporting changes if you're a CIS contractor' under 'More useful links' at the end of the page.
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HMRC need to know if the structure or ownership of your subcontractor business changes. This is because your CIS registration won't move over automatically to the changed business - you'll need to register again for CIS. Read the sections below to find out more about the different types of change.
A partnership is two or more people - or companies - who work together and share the profits from one business they control.
If you work as a sole trader subcontractor you might decide to get together with one or more other people to form a partnership. Or two or more existing partnerships might get together to form one larger partnership.
If this happens, the structure and control of your business will change. You'll need to tell HMRC about the change as soon as possible. You can't carry on using your sole trader CIS registration - or an old partnership registration - for the new partnership.
Your new partnership business needs to register for CIS as a subcontractor. If you want the new business to be able to get payments without any deductions taken off, you'll also need to apply for gross payment status.
If any of the partners leaves the partnership - or a new partner joins the business - you should call HMRC's CIS Helpline as soon as you can.
A sole trader is an individual who runs a business on their own.
If business partners split up and start trading individually, there's no longer a partnership. If this happens to your business and you start trading on your own as a sole trader, tell HMRC straight away. None of the former partners can use the old partnership's CIS registration for their new sole trader business.
This also applies if you were a director of a CIS registered company and you start up in business on your own as a sole trader. You can't keep using the old company's CIS registration - whether the company still exists or not. You'll have to apply for your own CIS registration as a sole trader business.
A company is a body that's legally separate from the person or people who own the shares in it and control it. Even though some companies are large businesses, it's possible for one person to be the only director and the only employee of a company. But this isn't the same as being a sole trader.
As your business grows you might decide to start trading through a company. This is known as 'incorporating' a business.
For example, a new company might be formed if:
The new company is always treated as a brand new business. This is the case even if the company takes over all the tools, people and assets from the old business or businesses.
A newly formed company will need to apply to HMRC for a new CIS registration. If you want your new company to be paid without any deductions taken off it must also apply for gross payment status.
The shares in many smaller companies are often held in one of the following ways:
These types of company are called 'close companies'.
One person is said to control a close company if they own more than 50 per cent of the company's shares. If one individual plus their relatives together own more than 50 per cent of the company's shares then that group of people is said to control the close company.
If your company is a close company you must tell HMRC if control of the company moves from one person to another - or from one group of people to another. This can happen when:
You need to give HMRC the names and addresses of any new shareholders within 30 days of their shares being transferred or issued. It's really important to do this promptly. HMRC may withdraw the company's gross payment status if you don't keep them up to date.
You should call HMRC’s CIS Helpline as soon as you are aware of any changes.
You should call HMRC's CIS Helpline as soon as possible if your subcontractor business ceases to trade.
If your subcontractor company goes into administration, receivership or liquidation it can keep receiving payments for work it's done under CIS. It should be paid in the same way that it was paid normally - either gross or net of deductions.
For example, if your company had gross payment status before the liquidator was called in, you should keep getting paid gross for any money that's still due to you under CIS.
You should call HMRC’s CIS Helpline as soon as possible if you're changing any of these addresses:
If you've got any questions about the types of change you need to tell HMRC about under CIS you can call HMRC’s CIS Helpline. If a change has happened - or is about to happen soon - you can also use the helpline to contact HMRC and let them know. You'll need to have all the relevant details of the change to hand.