The Construction Industry Scheme (CIS) sets out the special tax rules for subcontractors who work in the construction industry and how payments must be handled by contractors.
Services we provide for contractors
- Verify your subcontractors with HMRC
- Register you with HMRC as a contractor
- Ensure you pay your subcontractors correctly within the scheme
- Supply deduction statements to the subcontractors
- Keep your records in good order and supply HMRC with monthly returns
- Make sure you do not incur penalties by failing to submit your monthly returns to HMRC.
Services we provide for Subcontractors:
- Determine your status as a subcontractor or employee, (or both) and register you with HMRC accordingly
- Verify you with HMRC on behalf of your contractor
- Manage and organize your business records
- Prepare your end of year self-assessment tax return and calculate your tax liability/ refund where applicable
We make sure that we are always up to date with any changes to the CIS
As a contractor, you are required to meet specific obligations under the scheme, including registering with HMRC, checking whether your subcontractors are registered with HMRC, paying subcontractors, deducting tax and submitting monthly statements confirming these payments.
Sub-contractors: If you are a subcontractor, your main obligation is to register with HMRC. You must also keep HMRC informed of any changes to your business such as changes to your business address, business name, business partners and other relevant information.
Any contractor that you work for must determine whether or not you are to be treated as employed or self-employed for each and every contract. If you are an employee for the purpose of the contract, the contractor will need to operate a PAYE scheme whereby tax and National Insurance Contributions will be deducted from the payments made to you.
If you are self-employed, HMRC will register you as a sub-contractor under the CIS scheme and they will set you up to receive payments ‘under deduction’. This means contractors must make a deduction of tax at 20% (30% for unverified subcontractors) from the labour element of your invoices and pay it over to HMRC.
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