Tax certificates

There are two types of tax certificates which can be applied for by subcontractors.  These are as follows:

• The sub-contractors tax certificate CIS 6.  These are issued to sole traders, partners, and directors and company secretaries
• The construction tax certificate CIS 5, which are issued to certain companies.  Qualifying companies are those listed on the stock exchange, those with an annual turnover of at least £1m and those that can demonstrate a special need (please note that from 1 May 2001 partnerships which meet the criteria may qualify for a CIS 5).

All exemption certificates issued under the pre August 1999 scheme are invalid and there are no limited tax certificates for school leavers.

How to obtain a tax certificate

There are three tests which have to be met before obtaining a tax certificate.

(1) THE BUSINESS TEST

(2) THE COMPLIANCE TEST

(3) THE TURNOVER TEST