HMRC has recently launched a One-to-Many letter campaign targeting large businesses within the insurance sector that might be involved in activities related to the UK’s construction industry. The HMRC letters were dispatched electronically starting the week of 8 July 2024, with prior notifications sent to the businesses’ allocated Customer Compliance Managers (CCMs). Each letter was accompanied by an email containing a dedicated project mailbox for any recipient queries.
Below is a copy of the One-to-Many Letter being sent by HMRC:
The primary objective of the HMRC letter is to remind businesses of their obligations under the Construction Industry Scheme (CIS) and to encourage registration for CIS as 'deemed contractors' to improve tax compliance within the sector.
This educational letter is specifically aimed at insurance sector groups with entities potentially involved in commissioning ‘construction operations,’ either directly with subcontractors or through loss adjusters acting on their behalf. The initiative applies to groups regardless of their current CIS registration status.
This HMRC letter emphasises that insurance sector groups commissioning ‘construction operations’ with expenditures exceeding £3 million in any rolling one-year period must register for CIS as a ‘deemed contractor’. HMRC's goal is to ensure proper tax deductions from contract payments to subcontractors, including loss adjusters, and accurate reflection of these deductions in monthly CIS returns.
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