CONSTRUCTION INDUSTRY SCHEME (CIS) ACCOUNTANTS
CIS ACCOUNTING SERVICES IN THE UK
The Construction Industry Scheme (CIS) impacts multiple businesses involved in the construction sector, from contractors and sub-contractors to suppliers and those in ancillary industries. While it’s a big step forward in streamlining the UK economy, its nuances can be hard to understand on your own.That’s why we at Lyel Accountants offer tailored CIS services to help your business flourish. So what is CIS? Essentially, it applies to payments made for construction work. As a contractor, you must make tax deductions from your payments to your subcontractors and then pass them on to the HMRC. This only works, however, if the subcontractors are registered with the taxman. CIS applies to you if you are:
- A contractor
- A subcontractor (i.e. you work with a contractor on a self-employed basis or as a limited company)
- Both a contractor and a subcontractor (which could happen if your company works for a bigger contractor and then subcontracts to others)
- A business that spends over £1 million annually on construction work
- First, you need to register with HMRC.
- Then, check your subcontractor’s employment status and whether they are self-employed or employed with you. In the latter case, you must pay them via PAYE like your regular employees.
- If they are self-employed, check whether they are registered with HMRC as a subcontractor. If their registration is confirmed, HMRC will tell you whether to pay them the gross amount or make a standard deduction of 20%.
- If HMRC can’t confirm their registration, you must make a 30% deduction.
COMPLIANCE IS THE KEY INGREDIENT IN CIS
It’s vital to stay fully compliant with HMRC regulations about CIS deductions from day one. Luckily, Lyel’s dedicated CIS accounting services help you do exactly that. The services we offer include the following:
- Maintaining subcontractor records
- Verifying subcontractors online with HMRC
- Dealing with any issues related to CIS claims
- Preparing and submitting your monthly CIS returns
- Confirming the deduction rate for your subcontractors
- Advising you on your payment obligations and their due dates to avoid any penalties