Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) applies to payments for construction work. A contractor must make tax deductions from subcontractors and pass them to HMRC.
Construction Industry Scheme (CIS)
Construction is one of the most important industries in the UK, and a key part of the economy.
If you're working in construction or thinking about starting a construction business, it's important to understand how the Construction Industry Scheme works.
At DS Burge & Co, we’re experienced accountants for contractors and can guide you through CIS, explain how it impacts your tax situation, and deal with HMRC on your behalf.
Advantages of using DS Burge & Co's Construction Industry Scheme service:
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- You get a dedicated manager and 24/7 access to your business financials online.
- Our contractor accountants take the stress and hassle of keeping on top of your records, so you can focus on running your business and stay safe in the knowledge you're meeting your CIS obligations to HMRC and your subcontractors.
- We'll explain everything, from registering for CIS with HMRC to collecting the relevant information you need from your subcontractors.
We help you get in control, save money and save time
Schedule a free consultation to find out how we can help with the Construction Industry Scheme and deal with HMRC on your behalf.
What is the Construction Industry Scheme (CIS)
CIS applies to most payments for construction work from a contractor to a subcontractor. It works similarly to PAYE. The contractor is responsible for deducting tax from the subcontractor’s earnings and paying that directly to HM Revenue and Customers (HMRC) on the subcontractor’s behalf.
Testimonials
- We've used DS Burge & Co Accountants to process our business accounts for the past few years. Kieran and his team have provided an outstanding service during this time. Kieran's wealth of knowledge and understanding of finance and accounting has been invaluable for a business like ours. His advice and attention to detail is first class, and we would recommend DS Burge & Co Accountants to anybody in need of accounting services.Daryl H.1/26/2022
- When creative people get together their first topic of conversation isn't writing or film or music - but accountants. I have nothing but good things to say about Kieran Burge at D. S. Burge. As a professional author I need a good accountant, and Kieran is friendly, accurate, fast and good value. I'd not hesitate in recommending this firm -- Henry Gee, Author of 'A (Very) Short History of Life on Earth' and 'The Accidental Species, Mistunderstandings of Human Evolution'Henry G.1/26/2022
- Kieran was excellent in sorting out my tax return, pain free process & kept me in the loop the whole way through. I can’t recommend enough. Thank you again.Lianne B.10/26/2023
- Prompt, efficient service.Michelle W.1/30/2024
- I always feel I am being given a personal service with Darius. He responds to any queries immediately and I trust his advice implicitly. Also he is a very nice man and his fees seem to me to be reasonable. A very professional service that I highly recommend.Sara H.7/27/2021
- I’ve been using Kieran from DS Burge & co for a number of years now and I can’t rate them highly enough. I had never used a professional accountant for my self assessment before, so was anxious at how it would work and what to expect. Kieran was fantastic, he put me at ease immediately and was great at explaining everything to me, and answered all my questions in a clear and extremely helpful way. Since our initial meet, he had always been incredibly responsive to any emails or calls from me. Very professional, super responsive, great service. I wouldn’t use anyone else.Emma K.4/18/2021
- I have been using their services from last 24 years. I found them highly professional and helpful.T V.7/03/2021
- I've been using DS Burge for many years and they have always provided a great service. I use them for my personal finances, and for two businesses also. Very knowledgeable in all areas, and always available and helpful.Julian W.1/26/2022
- DS Burge & Co have handled our small business and personal accounts for several years. They have always responded to any requests promptly and professionally and they have always provided tailored and considered advice.Alan N.7/20/2021
- Darius has always been very helpful and has a very good range of knowledge built up from years of experience, i can thoroughly recommend their services for all your accountancy needs.wes p.7/20/2021
- Kieran and his team are excellent. Very responsive and very up to date on the latest accountancy rules and how to be most efficient with your affairs. I would highly recommend DS Burge. I have recommended them many times to my close friends.Dr M.1/05/2024
- I can't recommend Kieran and Yuko highly enough. They are thoughtful, responsive, reliable and trustworthy. I feel in very safe hands with them and they have supported the growth of my business right from the beginning. I always get a swift response to any queries or questions I have, and they are proactive, engaged and tech savvy. I have recommended them to several people and will carry on doing so as they provide an excellent service.Lisa Q.1/26/2022
- I use an accountant to give me comfort that I'm paying and have paid the right amount of tax. Kieran and his team do that and more at very fair prices! Their help during a routine HMRC review last year was invaluable and was handled in a calm and professional manner at all times. I can't recommend them highly enough and have recommended them to a number of acquaintances. If you're looking for a local accountant you should use DS Burge & Co!Jeremy M.1/26/2022
- Very pleased - professional and prompt service, with relevant points remembered and followed up a few months later. I would definitely recommend this firm. They act with integrity - something which is often lacking in many high street accountants these days (as I've discovered to my cost previously)Julie J.1/26/2022
- Recommended by a friend and I would recommend to anyoneJoachim M.1/12/2024
Contractor vs Subcontractor role in the Construction Industry Scheme (CIS)
Contractor
You are defined as a CIS contractor if you are working on projects in the construction industry and use subcontractors to do any or all of this work.
As a contractor, it is your responsibility to deduct tax from each payment to your subcontractors and pay this over to HMRC on their behalf every month. The rate of tax you deduct is dependent on the status of the subcontractor.
In addition to handling their CIS deduction, it is also your responsibility to provide each subcontractor with statements showing the deductions you have made against their earnings. Payments must also factor cost of materials that are deducted.
If you are a contractor and want help managing your payments and other tax matters, our contractor accountants are here to assist you, so please get in touch.
Subcontractor
You are defined as a CIS subcontractor if you are working on projects for contractors in the construction industry. The deductions do not apply to all types of work. In order to see a guide of all work that is and isn’t covered, view this CIS guide for contractors and subcontractors. Alongside typical construction work, CIS applies to jobs such as repairing and decorating.
As a subcontractor it isn’t necessary for you to register for CIS. However, if you do, you can reduce the tax deducted from the default 30% down to 20%. Furthermore, if you pass three the three tests summarised below, you can apply for “gross payment status” which will allow the contractor to pay you in full with no CIS deductions:
- Business Test – The business is run through a bank account
- Turnover Test – The business has a net construction turnover of £30,000 each year for each relevant person (director and beneficial shareholder if the company is close) or at least £100,000
- Compliance Test – The business has been up-to-date with its tax filings and payments over the previous 12 months
Deductions taken on a subcontractor's behalf will count as advance payments towards their Income Tax and National Insurance contributions.
As this tax is deducted at source without factoring in the subcontractor’s annual tax-free personal allowance and any deductible expenditure, when they come to fill in your self-assessment tax return at the end of the tax year, it is common for them to receive a tax refund.
Under CIS it is also possible for you to be classified as both contractor and subcontractor.
How to Register for CIS
You can register with HMRC for CIS through the gov.uk website:
- Contractor CIS registration through the gov.uk website
- Subcontractor CIS registration through the gov.uk website
If you are both a contractor and a subcontractor, you will need to register for the Construction Industry Scheme separately as both.
Don't delay! Get in Touch
If you are considering switching accountants, we can help make the switch smooth, quick and hassle-free.
We can help manage CIS on your behalf
To allow a contractor to process CIS deductions subcontractors must provide their name, unique taxpayer reference and national insurance number (or company registration number) when entering into a contract. These details allow the contractor to check the CIS status of the subcontractor and deduct the correct amount of tax.
Additional Services to Help with Your Tax
Alongside advising on CIS, our team can help review your tax requirements to ensure you meet all regulations and deadlines set by HMRC. Whether you need assistance submitting a personal tax return or want to look at setting up a limited company, we can help prepare and plan how to optimise your tax position.
Our Fees
We provide all quotes free of charge. After a free initial consultation to understand your situation, we will explain what you will need from us along with our fees in advance. With DS Burge & Co supporting your CIS requirements there is total transparency on what you are getting.
Whether a CIS contractor or subcontractor, our fees will also be tax-deductible to you.
We already help a large number of clients in the construction industry. If you’re looking for reliable accountants for contractors, or would like to find out more about CIS, and get a free quote, please don’t hesitate to get in touch.