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:
- Register you with HM Revenue & Customs (HMRC) as a contractor
- Verify your subcontractors with HMRC
- 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. SMY Associates work with numerous contractors and are equipped to deal with your needs efficiently. By making sure we are always up to date with any changes to the CIS regulations we can notify our clients quickly of any changes that may affect them.
Contractors: 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.
Subcontractors: 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.
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
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 labor element of your invoices and pay it over to HMRC.
Whether you are the contractor or the sub-contractor, As your local Accountant we can help you keep your CIS affairs in order.