Get to Know Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) is a tax regime that HMRC set up to cater for self-employment in the construction industry. Tax is deducted at either a higher (30%), net (20%), or gross level depending on the status of the subcontractor’s UTR number. Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor’s tax and National Insurance. Also, contractors must register for the scheme while subcontractors do not have to, but deductions are taken from their payments at a higher rate if they’re not registered. But the high side of CIS is that it includes not only the typical building and other civil engineering works but also the repairing, decorating, site clearing, and installing power systems. Construction Industry Scheme or CIS, in short, refers to the set of special rules issued by the tax office for handling payments made by contractors to subcontractors for construction work. This applies to contractors, subcontractors, and any organizations that spend a huge amount of money on construction, even though it is not their main work. If your firm or company is involved and is mixed up in construction, you should register it under CIS.
Get to Know CIS Payroll Services
CIS payroll refers to the payments made between contractors and subcontractors under the government’s Construction Industry Scheme or CIS. Contractors and subcontractors may encounter CIS payroll service companies through the course of their professional lives. CIS Payroll services protect and security contractors and subcontractors alike who seek to ensure HMRC rules relating to CIS are followed correctly.
CIS Payroll Services may include but are not limited to:
- Registering contractors for the CIS scheme with HMRC
- Verifying subcontractors with HMRC
- producing statements of payments & deductions on both monthly and quarterly basis
- Completing the monthly return and submitting it to HMRC
- Offering general advice concerning all aspects of CIS
Handling finances such as the income for the employees, clients, or agencies payments, or dealing with taxes nowadays can be a bit tricky and time-consuming for businesses, may it be for small or large companies. Having wise decisions is one of the ways that can give you convenience and an advantage in dealing with your finances. If you are thinking of a hassle-free way, CIS payroll company may be able to help you in the best possible ways.
In conclusion, the Construction Industry Scheme has numerous implications for both contractor and subcontractor payroll. Being physically involved in the construction industry often makes you eligible for CIS, although this still goes back depending on the nature of your work and the relationship through which you employ or are employed. Depending on whether you qualify as a contractor, a subcontractor, or neither, CIS will affect you differently. Some contractors have the choice and decide to outsource their CIS payroll obligations to an external payroll company with CIS specialty for them to focus more on other important aspects of their business. At the end of the day, the choice is always yours to make.