If you are a contractor or sub-contractor in the construction industry you must also register with the Construction Industry Scheme (CIS).
As part of this scheme, your contractor will take tax from you before they pay you, a lot like PAYE. If you yourself are a contractor you will also take tax from the sub-contractors that work for you. This money is sent to the HMRC.
Then at the end of the year, you take off the tax already paid from the tax due on your self-assessment return, and pay / get a refund for the difference.
By law all members of the scheme must keep records of all payments made, tax collected, materials costs deducted etc.
Sometime the amount of paperwork and tasks you need to complete can be overwhelming... but once registered and set up, it is a very straightforward process.
Monthly Submissions of CIS: If after setup you do not wish to submit your own CIS returns, we can do this for you, as well as calculating your sub-contractor's payments and tax, and sending them logo'ed CIS slips.
For clients using any of our CIS services - we will be happy to explain the CIS process to you, and answer any CIS related queries at any time during the service term, over the phone or by e-mail.
We can liaise with the HMRC on your behalf if assigned as your agent. We can also advise you on other CIS and employment issues, such as moving from sub-contractors to employees.
Our rates are shown on the What We Charge page.
Generally any sole trader, partnership or company involved in work on permanent buildings, temporary structures or civil engineering work or installation may have to register if they use sub-contractors.
Typical work under the scheme includes site preparation, general construction - bricklaying, roofing, plastering etc, alterations and extensions, repairs and refurbishment, decorating, dismantling work & demolition.
There are some grey areas however. For example, landscaping and fencing is not included in the scheme unless working on a new build, or for a developer as part of a property development project.
To ensure you comply with the guidelines it is recommended that you ask for advice or contact the HMRC.
For CIS the monthly periods are 6th to 5th of next month - i.e. 6th January - 5th February.
Returns and payments are due monthly, within 14 days from the end of the tax month.
For example, if you're making a return to cover payments you made in the tax month from 6 May to 5 June, it must reach HMRC by 19 June.
Late returns will be penalised £100 each for companies with less than 50 sub-contractors.
If you are registered but have not used sub-contractors for a specific month, you must submit a nil return.