CIS - Construction Industry Scheme

If you work as a contractor or sub-contractor within the construction industry & its associated Businesses, then you should be aware of your responsibilities under HMRC’s Construction Industry Scheme (CIS). 

How the Construction Industry Scheme operates 

Under CIS, registered contractors deduct money from payments due to a sub-contractor and pass it to HMRC. The deductions of either 20 or 30 percent count as advance payments towards the subcontractor’s tax and National Insurance contributions. Contractors must register for the scheme. Subcontractors don’t have to register but deductions will be taken from their payments at the higher rate of 30 percent if they’re not registered. Before a contractor can make a payment to a subcontractor for construction work, they should determine with HMRC whether the subcontractor is registered.

Each month, contractors must send HMRC a complete return of all the payments they have made within the scheme or inform HMRC where they have made no payments. The return will include details of the subcontractors, details of the payments made and any deductions withheld, a declaration that the employment status of all subcontractors has been considered and a declaration that all subcontractors that need to be verified have been verified.

The scheme has two aims – to reduce levels of fraud and tax evasion in the construction industry and to help subcontractors spread their tax liabilities over the financial year. 

All sounds rather complicated and time consuming? We can help

Contractors

If you need assistance with processing your CIS payments, Barnstone Accountancy can offer you an all encompassing support package. We’ll check whether the subcontractor is registered with HMRC for you and calculate the rate of deduction that needs to be applied to the sub-contractor payments. In order to ensure you remain CIS compliant, we will produce all relevant reports and file them with HMRC on your behalf via our our exclusive Agent portal leaving you to concentrate on running your Business.

Sub-Contractors

Barnstone can also offer CIS sub-contractors a comprehensive support package. We will guide you through the registration process to ensure that the correct rate of deduction is applied to your payments and provide support to ensure correct payment, deduction and tax records are maintained. We will help you with preparing your end of year profit return and any resultant tax liability calculations. As applicable we will also determine any repayments due back from HMRC.

For Limited Company Sub-Contractors, we can help you to set off deductions you bear against receipts for PAYE tax due from employees, employer and employee NI contributions due, Student Loans due from employees and CIS deductions made from the company’s subcontractors. We will provide these calculations either monthly or quarterly, as appropriate, and show them as part of the company’s Employer Payment Summary (EPS). We can also provide assistance with the company’s Full Payment Submission and final EPS at the end of the tax year.

If you’d like to speak with us to see how we can assist with your CIS requirements, then please press the “Contact Us” button or use the contact details listed below

No fuss, jargon free and easy to understand