Am I right I thinking that if I were to be investigated and his invoice comes back as a fake invoice am I therefor liable for the tax?
It's all or nothing here if the work ever comes within cis you need the full monty cis reporting - penalties can be something akin to a death sentance for small business due to the discmintory way hmrc do calculations potentially fining you multiple times for the same offence - unfotunately if you didn;t realise cis applied your more likely to find out 12 months later as one month later - hmrc should have a non penalty related naughty step for minor offenders IMHO.
Anyway if its not cis UTR isn't a biggie but its very good practice doing what you do - note UTR could easily be fake so more important is proof that person exists - proper invoice with local home address and paid via bank transfer should do teh job - if anyone loks dodgy print off any of their web related buisness advertising pages.
Note if it is cis you must verify before payments and this is your best tool over non compliance - ie let every subcontractor know before they agree to job - get then to sign cofnrimation that they will provide info and they wont be paid till you receive info - warn them tax deducted all approrpiate rate as indicated by hmrc not them - furthermore i would specifically warn them on that sheet that if they have not specificlaly called and registered as subcontractors via the subcontractor helpline then tax dedcution rate may be 30% even if they have fully registered as sole trader with hmrc (additional registration needed for cis )
Ok so you should either not have paid the subby anything or paid them in full.
(1) If non cis make clear what info you wnat before commencing - i would minimum sale sinvoice with full name and home address and paid bank transfer - utr isnt mandatory but you will be less likely to get dragged into spats between non compliant bods and hmrc - note even if an engagement is not cis hmrc may not know that immediately so tehy may think it is and start asking you questions.
(2)lets look at cis
Here is the link to the cis god bible that should be your trust friend - any doubts get confirmation from subcontractor helpline - date time and helper full name - warning NEVER rely on cis helpline staff use them to backup formal advise in writing only!
Note many will tell you cis does not apply with regard to residential work and they are all telling porkies - residential work is only ignored from teh point of view of homeowners and others not in buseness eg btl property owners who are generally deemed not to be in business
Ok lets look at landscaping
FA04/S74 (2)(f) says that ‘operations which form an integral part of, or are preparatory to, or are for rendering complete (other construction operations including … landscaping’ are within the scope of the Construction Industry Scheme.
landscaping a housing estate, an industrial estate or the surrounds of a house as a finishing operation in a wider project of construction
Excluded from CIS
routine landscaping, gardening, forestry and tree surgery not undertaken in the course of a wider project of construction
Ok this is the dangerous borderline kind of situation where the supply could easily flip between cis or non cis depending on other fcators - this is often the case with cis and you only need one element inside cis to potentially bring the whole supply withi cis
The good news is potentially the work defaults to not bieng cis unless the work is part of a wider project on construction if my reading of the above is correct.
Unfortunately once you get into the more technical borderline areas if you ring the subcontractors helpline 4 times- they might say not cis 3 times and cis one time and they may only be correct 1 time out of 4!
If you want concrete proof write to hmrc and even then they will probably not answer you questions and simply print the baove links that you may have quoted to them
If work does come within cis then you should register as contractor and get all the paperwork up and running the minute you know you will be engaging A subcontractor - relevant reference take time to get issued and then you need codes to access online services so time is not your friend the fisrb time you engage a subcontractor - the only good news is its always based on "payments made" note tax month starst the 6th of each month - so if you have verified by phone and are awaiting pincodes in the post t o file online - try not to pay tem until after 5th month if you want to maximise time before monthly filing is needed (19th of next month is date you need to file return) -ie pay 5th month or earlier file return 19th of that month - pay 6th of month or later file 19th off following month.