CIS - Construction Industry Scheme

What is the Construction Industry Scheme, CIS?

The Construction Industry Scheme (CIS) sets out the rules for how payments and taxes to subcontractors for work in the construction industry must be handled.

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B4Bookkeeping can manage your CIS Tax deductions

As a contractor, you must:

register for CIS with HMRC
check that your subcontractors are registered with HMRC
pay subcontractors accordingly; Their Invoice value less CIS Tax
submit monthly CIS returns to HMRC
pay CIS to HMRC monthly (You are the collector of the CIS for HMRC)

As a Subcontractor, you must

register with HMRC, a simple online application as self-employed
if you are not registered, contractors have to deduct the higher 30% rate instead of the registered 20% rate off your invoices

Running a Limited Company under CIS

You can offset your CIS deductions Taken/Suffered from payments received against the following:

any PAYE payments due to HMRC
your National Insurance contributions
CIS deductions the company has made from its subcontractors

HMRC will repay any deductions that the company is not able to offset against its PAYE liabilities

Offsetting your Monthly CIS liabilities to HMRC

You can offset your CIS liabilities against your PAYE/NI payments each month.

This will either reduce your CIS payments or eliminate them!

CIS Record Keeping

You must record all the amounts taxed.

Sign up for CIS

To sign up for the Construction Industry Scheme, please login into HMRC online service to register - https://online.hmrc.gov.uk/login

HMRC have a dedicated helpline 0845 366 7899 if you get stuck

Reverse Charge VAT for Contractors

Domestic Reverse Charge came in in Mar 2021 and applies to VAT-registered Contractors and VAT registered Intermediary Customers.

This means you don't need to charge VAT on to your Customer if they are not the End-user.

Your Invoice will not show VAT but has to say "Reverse-Charge Supplies".