The Construction Industry Scheme (CIS) has special tax rules and documentation for subcontractors working in the construction industry. It also details how these contractors should handle all payments that come into their business. We can help you sift through all the documentation required in this scheme and ensure you aren't breaking any rules.
You are required to meet some laid out conditions in the scheme to remain compliant. Some of these conditions include registering, checking the status of your subcontractors, paying your subcontractors, removing taxes and submitting monthly statements that back up the payments.
Services We Offer Contractors
- Proper registration with HM Revenue & Customs (HMRC) as a certified contractor
- Verify all the subcontractors working with you with HMRC.
- Ensure accurate payment to all your subcontractors per the CIS scheme
- Keep proper records and bookkeeping to give HMRC the correct amounts for monthly returns.
- Give the subcontractors deduction statements.
If you fail to submit your monthly returns to HMRC, it could result in penalties and fines. We can help you prevent that with our experience in dealing with contractors over the years. Our team has an in-depth understanding of all the processes, documentation and procedures that you need to carry out to stay compliant. Also, we are aware that many of these rules are constantly changing. That is why we keep track of the CIS regulations. If there is any change, we notify you and advise in ways that could affect you.
As subcontractors, the scheme states that they must also register with HMRC. In addition to that, you must inform HMRC if there are any business changes like business name, address, partners or other relevant information.
Services We Offer Subcontractors
- Confirm subcontractor status or employee and register with HMRC
- Verify identity and status of a subcontractor with HMRC for the contractor
- Organise and keep all business records in place
- Prepare self-assessment tax returns yearly and calculate any tax liabilities or refund depending on the case.
As a subcontractor, the contractor you work for must determine whether or not you are treated as an employed or self-employed individual for each contract. This is usually an agreement between a contractor and subcontractor based on business needs and preferences. If you are placed as an employee for the contract, your contractor will have to operate a PYE scheme to deduct National Insurance Contributions and tax from your payments.
On the other hand, if you register as a self-employed subcontractor, HMRC will use the CIS scheme to register you as a sub-contractor and arrange payments for you “under deduction”. In this case, the contractor should make a 20% tax deduction from the labour element of invoices to pay to HMRC. If the subcontractor is unverified, the tax deduction is 30%.
Regardless of which side you fall on – contractor or subcontractor, we can help you bring order to your books and make sense of the CIS. Call us today and find out how we can help you.
Get in touch with one of our industry experts today! We look forward to hearing from you.
Who am I? - Dinah Jones, from Leeds
What do I do? - Accountant, Business Advisor, and Trainer in Cloud Technology
What is my area of expertise? - 25 years as a qualified Accountant plus personal and business taxation consultant. I have concentrated on cloud software and business growth
Why do business hire you? - To improve their profits, overview their systems and reduce their costs. After an initial consultation clients can see how they business will benefit and as they are not locked into a contract it’s a no brainer.
Why you, how can you help? - Clients like to have choices and given the opportunity to run things their way, especially when growing. Its expertise they need to assist them not dictate to them.
I like to ask them, how does your business grow and perform? It can be an intense conversation but always fruitful.