Engagement Letters: Subcontractors Terms

(1) You will provide us with all subcontractor information, as required, when a subcontractor is engaged for work.

You will provide us with the following once a contract has been signed or a tender agreed or a subcontractor engaged for work:

• where the subcontractor is a sole trader you will provide their full name, unique tax reference (UTR) and national insurance number;
• where the subcontractor is a partnership you will provide the firm’s name and unique tax reference, as well as the individual partner’s name, unique tax reference (UTR), and national insurance number. If the partner is a company you will provide the company’s unique tax reference (UTR) and registration number; or
• where the subcontractor is a limited company you will provide the company’s name, unique tax reference (UTR) and registration number.

(2) You will be responsible for ensuring that verification procedures are carried out in accordance with the regulations.

It is important to note that verification procedures must be carried out before any payment can be made to the subcontractor. We will not be responsible for delays in paying subcontractors where we have not been provided with the information in time for us to be able to carry out the verification. Subcontractors can carry out work prior to verification.

Where you have already included a subcontractor on a monthly return in the last two years separate verification will not be required. In these circumstances, you will provide us with the verification reference previously obtained, along with the deduction rate as advised by HM Revenue and Customs.

(3) You will provide us with relevant information, as requested, by the 10th day of each month.

In order for us to provide you with details of the net payments and deductions amounts for each subcontractor you agree to provide us with the following by the 10th day of each month:

• the amount of gross payment (excluding VAT) due to each subcontractor; and
• the amount of own materials cost included within the gross payment. In providing this to us you confirm that you have either obtained direct confirmation from the subcontractor of the amount or you consider the amount not to be excessive.

(4) You will be responsible for preparing the written statements of deduction.

You will be responsible for preparing the written statements of deduction to support each payment and providing them to each of your subcontractors by the 19th of the month following payment.

(5) You will forward copies to us of any HM Revenue and Customs correspondence relating to your subcontractors.

If you receive a notice of change from HM Revenue and Customs with regard to a change in deduction status for one of your subcontractors you undertake to forward it to us immediately. We will not be responsible for failure to effect a change where we do not receive the notice in time.

You agree to forward to us any communications related to CIS you receive from HM Revenue and Customs in time for us to deal with them as necessary within any time limits. Although HM Revenue and Customs have the authority to deal with us directly, it is still possible for them to contact you without us being aware.

(6) You will be responsible for confirming the self-employment status of all your subcontractors.

You will be responsible for confirming the self-employment status of all your subcontractors.