What is CIS – Construction Industry Scheme
The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.
CIS applies to all contractors and subcontractors that are in the mainstream of construction work.
Other business such as those who have a high annual spend on construction may also be considered as contactors and fall under the same scheme, even if their main activity isn’t construction.
Why get Your Virtual Office to do your CIS?
- Completed on time every month
- Payments submitted on your behalf
- Certificates sent to sub-contractors
WHAT A SUBCONTRACTOR NEEDS TO DO:
You should register for the Construction Industry Scheme (CIS) if you work for a contractor and you’re either:
- The owner of a limited company.
- Under CIS, a contractor must deduct 20% from your payments and pass it to HM Revenue and Customs (HMRC).
These deductions count as advance payments towards your tax and National Insurance bill.
If you don’t register with the scheme, contractors must deduct 30% from your payments instead.
WHAT AN EMPLOYER NEEDS TO DO:
You must register for CIS before you take on your first subcontractor.
1. You must check if you should employ the person instead of subcontracting the work. You may get a penalty if they should be an employee instead.
2. Check with HM Revenue and Customs (HMRC) that your subcontractors are registered with CIS.
3. When you pay subcontractors, you’ll usually need to make deductions from their payments and pay the money to HMRC. Deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.
4. You’ll need to file monthly returns and keep full CIS records – you may get a penalty if you don’t.
5. You must let HMRC know about any changes to your business.
So if you want us to handle your calls in your company’s name, contact us on 01268 411 269.