Construction Industry Scheme (CIS)
Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) sets out the rules for how payments made to subcontractors for construction work must be handled by contractors.
The CIS covers all construction work carried out in the UK and jobs such as site preparation, alterations,demolition, construction,repairs and decorating. All types of businesses that work within the construction industry are covered by the scheme such as companies, partnerships, and self-employed individuals.
Contractors
Contractors include construction companies and building firms and also government departments and local authorities. Any other business spending more than £1 million a year on construction is classed as a contractor for the purposes of the CIS.
As a contractor you will need to do the following:
Register with HMRC.
Check to make sure your sub contractors are registered with HMRC.
Calculate the right amount of CIS tax from the subcontractor and pay this over to HMRC.
Calculate the net amount after tax, and pay this over to the subcontractor.
Record the details of the materials, deduction and payment.
Provide subcontractors with deduction and payment statements.
File monthly CIS statements to HMRC, confirming these payments.
Subcontractors
As a subcontractor you will need to do the following:
Subcontractors who do not wish to have tax deductions made from their payments at the higher rate of 30% should register with HMRC. Once registered, the contractor will deduct 20% or potentially 0%, if you’re eligible to be paid gross.
Help your contractor verify you with HMRC
Manage and organise your business records
Our Services
Whether you’re a contractor or subcontractor, or both, we have a great deal of experience in this field and can provide you with a step-by-step guidance on how administer the scheme. We will also calculate the tax liability and refunds that become due and submit the appropriate paperwork over to HMRC every year.
Along with your CIS you may also need to consider Payroll, Self Assessment, VAT, Bookkeeping, Accounts Preparation, Corporation Tax. We can also undertake all of these other services for you as well. What’s more is that most of these services will be undertaken by the actual partner, which is something that just isn’t offered anywhere else.
How much is it?
We can offer cost effective packages specifically designed for CIS contractors & Subcontractors. Please contact us for further information.
Frequently asked questions
How Do I register for CIS? This will depend on whether you are going to be self employed or through a company. Please contact us and we can guide you accordingly.
As a subcontractor why should i register for CIS? Although it’s not compulsory to register for subcontractors, it may be painful if you don’t. Registering means that your contractor will only deduct 20% of your pay rather than 30%. You many then also be eligible for Gross payment status if you pass the tests, where no tax will taken from your pay by the contractor. You will then eventually need to pay this tax over yourself at the end of the tax year.
What expenses can i claim as a CIS subcontractor? You can claim the expenses such as: Equipment, tools, materials, protective clothing, travel, transport,telephone bills, builder’s liability insurance, accountancy fees and more.
What should i do if i have worked PAYE and CIS in the same year? Don’t worry, we should still be able to help you get the tax refund and do your tax return.