Construction Industry Scheme Tax (CIS)
CIS Tax is a very specific part of the UK Tax system which details how contractors should hire sub-contractors working within the construction industry, and how payments should be made for work done including the withholding of income tax.
Whether you are the main contractor or the sub-contractor, Sherlock & Co can deal with all aspects of your CIS Tax.
How can we help?
If you are a new contractor, you may not be aware of all the obligations that you are required to meet before you can legally continue working. Our expert CIS accountants will work with you to ensure you are fully compliant with HMRC, all the while offering easy-to-understand advice along the way.
For Main Contractors, our CIS team will help you:
Register with HMRC as a contractor;
- Verify that sub-contractors are registered with HMRC for the correct CIS deduction;
- Ensure sub-contractors are paid in compliance with the scheme;
- Prepare and issue CIS Statements for sub-contractors;
- Liaise with HMRC notifying them of monthly deductions made and off-setting against CIS suffered etc; and
- Advise on special VAT rules which govern how businesses working within the Construction Industry must account for VAT.
For Sub-Contractors, our CIS team will help you:
Register with HMRC as a sub-contractor;
- Ensure that the correct tax has been deducted throughout the year; and
- Ensure that CIS Tax dedcution in the year is off set against the overall tax liability or ensure that the correct refund is made by HMRC.
Our friendly and experienced team at Sherlock & Co will assess your situation and run you through various steps and documentation that you will need to get started. Our primary goal is to make the process as stress-free as possible, so you can focus on running your business.
What is CIS tax?
CIS tax is an HMRC scheme intended for collecting tax for construction workers who are registered as self-employed. As opposed to self-employed workers in other sectors, CIS demands an automatic tax deduction from your pay where it would otherwise have to be paid manually at the end of the tax year.
CIS tax covers most construction work, including:
- Site clearing;
- Decorating; and
- The installation of power systems.
If you are unsure whether your work can be covered by CIS tax, contact us for expert advice and guidance regarding your situation.
Why do I need to deal with CIS tax?
As a self-employed subcontractor, you are liable to pay tax on any business profits made from working for a contractor. Failing to set this up may lead to fines against you for not paying what you legally owe. By signing up for CIS, your tax will be automatically deducted, by the contractor, which can be better for cashflow.
Like any employer, contractors must also understand what their obligations are to their hired workers and take their needs seriously. Subcontractors in the construction industry are not automatically entitled to certain employment rights, including:
- Sick pay;
- Annual leave;
- Maternity leave;
- Minimum pay;
- The right to join a union;
- Health and safety protection; and
- Discrimination rights.
With this in mind, contractors with hired workers should recommend the Construction Industry Scheme to their sub-contractors so they have access to its protections and benefits.
Different industries may have different laws and schemes available, such as CIS tax. To find out which one is best for you and your business, contact an expert for support and advice.
Visit our team page to find out more about our expert advisers.