Now you may have read the title to this blog and be wondering what property flips have to do with the Construction Industry Scheme (CIS). If that is what you are wondering then you definitely need to read on.
Many people think that buying a property in disrepair and ‘doing it up’ is nothing to do with being a builder. Unfortunately nothing could be further from the truth. The Construction Industry Scheme applies to the ‘construction, demolition, alteration or repair’ of a property.
This definition covers just about everything you can do to a property. Accordingly if you buy a property to ‘do up’ and sell on and in doing so pay tradesmen such as an electrician to work on that property then you need to check their tax status with HM Revenue & Customs and deduct tax at the appropriate rate.
What should you do? Well first of all register as a contractor with HM Revenue & Customs and then deduct tax at the appropriate rate.
If you have been flipping property already and failed to do this then you should come clean to HM Revenue & Customs to mitigate your penalties.
Reynolds and Co can help you with all aspect of property flips and CIS.
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