What's the need?

The Construction Industry Scheme for Tax applies to contractors and sub-contractors who work in construction. A Contractor is a business that pays sub contractors to undertake construction work for them and a sub-contractor is a business which is paid by a contractor for construction work. Businesses that fall within these scheme are legally required to register with HMRC as a sub-contractor, contractor or both. Once registered all the CIS deductions you suffer (are withheld by your customer) and CIS Deduction you make (withold from sub contractors working for you) are weighed up against each other and any liability paid to HMRC on a monthly basis. At the end of the year you are entitiled to claim back any overpayment of tax.

When you register for the scheme you are placed in one of a few catagories, most people are registered as NETT which means you will be deducted 20% of the labour element of your invoice. If you do not register then you will be placed in the higher deduction category and your customers will legally be required to deduct 30% from the labour element of your invoice. If you tax affairs are in good standing you can apply to HMRC for gross status which means you are paid without deduction.

We Can Help!

If you are starting out as a tradesman we can register you with HMRC, get you a UTR number, track any CIS deductions you suffer and claim your tax back at the end of the year. As part of our company formations service we can get you started with all the templates for submitting your invoices and on the road to working for yourself in construcion and be on hand for any of your accounting needs throughout the year.

If you employ sub contractors and deduct CIS tax from then the situation is a little bit more complex. The Act of running a CIS Scheme follows a cycle of recieving invoices from sub contractors, deduct CIS before you pay them, on a monthly basis issue them with a statement of what you have deducted. You then add these deductions to any National Insurance and PAYE tax you may owe to HMRC and pay it over, minus any amounts of CIS that you have suffered yourself, submit a submission to HMRC to report the amount of CIS you have suffered - then the cycle starts again. Failure to report on time triggers fines.

We can manage your CIS scheme for you, we can verify new sub-contractors with HMRC to establish how much deduction you should be making from them. We will manage the monthly cycle of recording what deductions you make from your sub contractors and what deductions you have suffered from your customers, we will take care of the issuing of monthly statements and reporting to HRMC.

How much does this cost?

The cost depends on a number of factors including how many sub contractors you have, how many invocies are processed in a month, what other services you have with us and wether you are a sub contractor or a contractor. If you have bookkeeping with us then the cost will be cheaper as the sub contractor invoices are processed as part of the bookkeeping fee.

Contact Us for a no obligation friendly chat about your needs.