Construction Industry Scheme
CIS is just a short abbreviation for the Construction Industry Scheme, which sounds a lot more complicated and intimidating than what it actually is. Just like other ‘schemes,’ CIS is a set of important tax rules that apply to self-employed people who work in the construction industry, and can include other labour-intensive and building jobs such as repair, demolition or painting and decorating.
When you go and register to let HMRC know that you’ll be following the CIS rules, you’re going to have to tell them whether or not you’re a contractor or a subcontractor. There are different rules and regulations for both of them and, even though it’s not a difficult question, it’s one that you definitely want to make sure that you get right. Here are some of the rules you’ll need to follow, depending on which one you pick.
This section is for contractors and if you are subcontractor, please go to I’m self-employed section.
Are you a contractor?
If you’re a contractor, you have to verify any of the subcontractors that you didn’t include on a CIS return for the past two years (basically all new ones). Then, after verifying them, you have to deduct specific amounts of money from what you paid your subcontractors. Don’t worry, though, HMRC will help you out and let you know exactly what percentage you need to deduct (sometimes you won’t even have to deduct anything at all!). If it seems a bit difficult even from here, we can take care of it for you – no worries!
Completing Your CIS Returns
If you’re following the CIS rules, you do need to file those pesky monthly returns with HMRC. This will let them know exactly what payments you’re making to your subcontractors on a monthly basis according to CIS rules.
When you have your returns all prepared and ready to submit, you can do so either online or by post. We prefer to submit the returns online, because not only is it very easy and quick, but HMRC receives it the very moment we press ‘enter’ button! No waiting to make sure that the mail got there on time, or, worse yet, that the mail was lost! That can be a real problem if it occurs, as HMRC has some pretty harsh penalties if you’re late, even if the delay was not fault. Don’t forget – when you do your monthly returns, you also need to be preparing a monthly statement to give to all your subcontractors. This statement will tell them both what they earned by working for you, and how much tax you deducted from their pay for them.
You’re a business owner, though, and you have a lot on your plate. There are lots of things to do each day – clients to see, employees to manage, paperwork to take care of, goals to meet. Definitely more important things than filing a CIS return every, single month. Sildi’s tax experts have years of experience with CIS returns and can take care of it for you, simple and easy. Just send us a few details each month, and we’ll take it from there.
This service is offered as a stand alone or as a part of any of our packages. Please contact us should you wish to discuss it or if you have any questions. Our email address is [email protected] Or call on 020 7372 8960.