The Construction Industry Scheme is a scheme run by the HMRC. In a nutshell, anyone using a subcontractor within the construction industry must verify them with the HMRC. Then, each time they pay them, they must deduct:
• 20% of costs invoiced, less VAT and materials, if they are verified as “Net”
• 30% of costs invoiced, less VAT and materials, if they are verified as “Unverified”
If they are shown as “Gross” when verified, no deduction needs to be made.
The contractor then pays the subcontractor the net amount, with a CIS statement showing any tax deducted, submits a return to the HMRC and then pays the tax to the HMRC. The whole system is based on when the subcontractor is paid.
Contractors and subcontractors both need to register for the scheme. Sole Traders and Limited Companies reclaim the CIS suffered in different ways.
What Services Do We Offer?
|✔||If you have sub-contractors, we can register you with the HMRC.|
|✔||After setup we can submit your CIS returns, as well as calculating your sub-contractor’s payments and tax, and sending them CIS statements by email. We can then let you know what to pay, how and to whom.|
|✔||If you are a Limited Company who suffer CIS, we can submit monthly reclaim returns for you, and arrange to claim back or offset the CIS for you at the end of each tax year.|
|✔||We are specialists in dealing with CIS and can sort out past CIS payments, and restate previous month returns if errors have been made, as well as liaising with the HMRC. We can also backdate and complete returns for those who have registered for the scheme late.|
|✔||We can also contact your customers for old CIS statements that may be missing, and help deal with any conflicts with customers or subcontractors that the scheme can cause.|
For clients using any of our CIS services – we will be happy to explain the CIS process to you, and answer any CIS queries at any time during the service term. We can liaise with the HMRC on your behalf if assigned as your agent. We can also advise you on other CIS and employment issues, such as moving from sub-contractors to employees. Our rates are shown on our What We Charge page.
Please find below a downloadable PDF guide with more details about CIS.
A new CIS VAT Domestic Reverse Charge which will take effect from 1st October 2020. For more information see our blog article and guide.