East Wood Accountancy

Taxation Services LTD

 

0208 252 4860

0789 619 9725

             
 

Construction Industry Scheme (CIS) contractor & Sub- Contractors

 


You must register as a contractor with the Construction Industry Scheme (CIS) if:

  • you pay subcontractors to do construction work

  • your business doesn’t do construction work but you usually spend more than £1 million a year on construction

You may be a sole trader, in a partnership or own a limited company.

 

Rules you must follow

  1. You must register for CIS before you take on your first subcontractor.

  2. You must check if you should employ the person instead of sub-contracting the work. You may get a penalty if they should be an employee instead.

  3. Check with HM Revenue and Customs (HMRC) that your subcontractors are registered with CIS.

  4. When you pay subcontractors, you’ll usually need to make deductions from their payments and pay the money to HMRC. Deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.

  5. You’ll need to file monthly returns and keep full CIS records - you may get a penalty if you don’t.

  6. You must let HMRC know about any changes to your business.

  7. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.

 

Services we provide for Contractors & 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.

 

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 subcontractor 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 per cent (30 per cent for unverified subcontractors) from the labour element of your invoices and pay it over to HMRC.

Whether you are the contractor or the sub-contractor, we can help you keep your CIS affairs in order.

 

 

 

 


 

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