Before subcontractors are verified, builders have to check they are genuinely self employed and are not actually employees who should be payed under PAYE.

There are lots of technical arguments around this issue but workers are usually self-employed if they are in business on their own and are responsible for the firm’s success or failure.

Builders must make returns to the Revenue every month detailing what payments and deductions have been made to all subcontractors.

HMRC will also want a declaration confirming that you have checked everyone’s employment status and carried out the verification process properly.

No-one likes paying tax. But complying with the Construction Industry Scheme is the only way you as a small builder can avoid a visit from HM Revenue & Customs and a hefty fine.

Construction has its own tax regime governing how payments to subcontractors for building work are handled by companies.