The CIS (Construction Industry Scheme) settlement determines the terms of settlement and payment between contractors and subcontractors in the construction industry.
It essentially works like the equivalent of PAYE, in that the contractor calculates and deducts the percentage of any payment due to HMRC before the sub-contractor receives it. These deductions then count as advance payment of the sub-contractor’s tax and National Insurance.
It is mandatory for contractors to register under the scheme, but not for sub-contractors. However, you will have payments taken at a higher rate of 30% if you are not registered.
If your business is registered outside the UK must still register for CIS if you do any construction work in the UK.
The longer you have worked in construction, as a contractor or sub-contractor, the more likely that you have overpaid CIS. This is because CIS is deducted at a statutory percentage and you may have paid too much tax and National Insurance on top of your CIS deductions. We can examine your financial records and identify any rebates you are entitled to. We will work with you to claim the rebate from HMRC.
We can guide you through your allowable expenses for your annual tax returns to HMRC. We find that contractors and sub-contractors in the construction industry often fail to make the most of their travel expenses allowance, especially taking into account HMRC’s 24-month rule.
Self Employed obligations
You can read more about the general obligations of self-employed persons towards HMRC HERE
On the Right Track
At Sylwia Klocek Accounting we keep our clients on the right track, avoiding trouble with HMRC and maximising income. We take care of the paperwork to leave you to get on with business.