The construction industry has specific accounting and financial requirements – namely the Construction Industry Scheme (CIS) which relates to payments made to subcontractors for the work they’ve carried out.
Whether you’re a sole trader, partnership or limited company, you must register for the scheme as a contractor and deduct money from your payments to subcontractors, in line with their verification status. That deduction is then passed onto HM Revenue and Customs.
Deductions count as advance payments towards the subcontractor’s National Insurance liabilities, for which the contractor is required to provide monthly CIS certificates. Although subcontractors don’t have to register, it is a quick, easy process that can avoid higher rate tax deductions.
It’s a legal requirement for contractors to submit monthly CIS returns to HMRC by the 19th of each month. Deductions must be paid by the 22nd and accurate records kept. Failure to do so will result in HMRC issuing a penalty.
We offer a comprehensive service covering all aspects of CIS – including subcontractor verification, monthly returns, CIS certificates, tax notifications and CIS reclaims for those acting as both contractor and subcontractor.
Whilst you focus on building your business, we can help you keep your finances compliant and in order. Get in touch to arrange a chat.