Construction Industry Scheme (CIS) Support
For support and oversight for Construction Industry Tax UK, whether you’re a contractor or a subcontractor, we can help.
No matter the size of your business, our professional accountants can help and support your needs.
If you are a contractor or sub-contractor working in the construction industry our CIS returns experts can save you money and time, get in touch to see what they can do for you.
All subcontractors in the construction industry must complete a personal tax return each year.
This is so that HMRC knows how much you earned, how much money has been spent on your business, and how much, if any, CIS tax you have already paid.
It is important as a subcontractor that you register for CIS, otherwise the penalties can be very costly, and your tax rate will rise from 20% to 30%.
When registering under the Construction Industry subcontractors scheme you will be asked to provide the name of your company and your unique taxpayer reference (UTR).
You can decide whether you want your contractor to pay you under your registered business name or the trading name that was provided to HMRC.
Once this is done, your contractor will pay you ‘under deduction’, normally at a rate of 20%, this should cover your tax and national insurance for the year.
Most over pay tax in this way because it doesn't consider the money you spend on tools, vat, materials, plant hire, or consumable stores.
Most subcontractors each year are entitled to a tax refund, on average sub-contractors get a tax return of £2500 per year as most will have paid more CIS tax than they owed HMRC.
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The Construction Industry Scheme (CIS) gets contractors to deduct money from the subcontractor’s payments to give to HMRC, this rate is usually around 20% and will be used as advanced payments for the sub-contractor’s tax and national insurance.
All contractors must be registered for the CIS scheme.
To register with the Construction Industry Scheme, you need to contact the CIS helpline on 0300 200 3210.
You will need you Unique Tax Reference Number (UTR) and have already registered as self-employed.
Everything gets put through electronically so you can get your refund as quickly as possible.
Even though we do this, HMRC can refund the payments and different times.
We have a system that will provide oversight for CIS refund and will chase up HMRC to make sure that they pay you back.
In our experience you will receive you CIS refund no earlier than 7 days and no later than 6 weeks.
We do not take a percentage of your CIS refund. We prefer to operate on a flat fee of £19.50 a month as opposed to a percentage.
This fee covers all of the work we do for you and also our representation of you in the event of an inquiry.
There are many things that you can claim your money back for, these are wide and varied. Most costs incurred whilst doing your work are re-claimable on your taxes.
Many expenses that can be claimed are not often thought of, but we are here to help. We work hard to make sure you get the full refund you deserve.
We often have sub-contractors come to us with this issue.
As professional accountants we have other ways in which we can calculate your income and expenses. We will use these to make sure you get your full refund from the CIS taxes you have paid.
Your individual accountant can then work with you to help the record keeping, making sure it doesn’t present you problems in future.
Unfortunately, you cannot deduct your mileage from the taxes as you are self-employed and registered for CIS.
When dealing with a contractor as a sub-contractor in your daily rate you should be charging for your travel costs and insurances.
You can contact us, and we’ll do it for you.
When you have paid CIS deductions these should be claimed through your company or business payroll scheme. Do not try to make a claim against your Corporation Tax return because it is likely you will receive a fine.
Monthly Full Payment Submissions (FPS) get sent to HMRC as usual. An Employer Payment Summary (EPS) should also be sent to your employer.
Most ‘labour only’ sub-contractors will have tax deducted at a flat rate of 20%.
This can only happen if HMRC know your UTR on the list of CIS subcontractors.
However, this can rise to 30% as a penalty for not doing your CIS returns on time or correctly.
This all depends on whether you are already employed.
First you must register as self-employed, if this has already been done then your CIS registration can be done as quickly as in a few days.
However, if you are not yet registered to be self-employed registration with CIS can take up to 6 weeks.
Contractors must deduct money from their subcontractor’s payments to pay HMRC under the Construction Industry Scheme (CIS).
These CIS deductions are advance payments towards the subcontractors National Insurance and tax. This is to ensure that sub-contractors are up to date with their taxes.
However often the subcontractors will have overpaid their taxes for the year and we can help to get a rebate for them.
If you are a contractor, you must be registered for CIS before you take on your first sub-contractor.
Sometimes they should not be a subcontractor but an employee instead and you must also check this, if they are a subcontractor instead of an employee then you will most likely incur a fine. You must also check that your subcontractors are registered for CIS with HMRC.
If you are a subcontractor you must register for CIS before you begin work or you will incur a penalty, and your tax rate will rise. Usual from 20% to 30%.
For subcontractors, under the construction industry scheme you will pay a fixed amount of 20% which will cover you National Insurance and income tax.
Many subcontractors are then entitled to a refund under this scheme as it does not consider your expenses.
Under the Pay as You Earn (PAYE) Scheme, as an employee, then you pay the ‘correct’ amount of tax. Any refund will be given through your wages.
With a number of similarities to PAYE, the Construction Industry Scheme (CIS) is a mandatory withholding tax where either 20% or 30% is deducted from a self-employed construction subcontractor's payments and paid directly to HM Revenue and Customs on their behalf.