What is the Construction Industry Scheme (CIS)?
The CIS provides a set of rules for the payments made to subcontractors from contractors. This is to make sure subcontractors pay the correct amount of tax. It’s easy to register for CIS, it’s official, and most importantly, it can save you money.
Wondering how to register for CIS to start saving money on your tax bill? It’s simple, just fill in the online CIS registration form and you’ll receive your CIS number and CIS card shortly after.
Subcontractors who register for CIS need to:
- Send invoices to their contractors who will deduct 20% into their personal tax pot (the contractor won’t deduct it off the amounts you charge for VAT, plant hire and other expenses)
- Submit an annual Self-Assessment form to the HMRC declaring their earnings and expenses.
Contractors who register for CIS need to:
- Submit monthly return forms to HM Revenue and Customs
- Make sure the form lists all the payments made to subcontractors as well as the tax deducted
You can be both a CIS Contractor and CIS Subcontractor if you:
- Carry out work for a CIS contractor while passing on some of the work to another CIS subcontractor.
- If this is the case you will need to carry out the aforementioned responsibilities of a CIS contractor and CIS subcontractor.
What will you need?
In order to register as a subcontractor for the CIS you need to have a National Insurance (NI) number and a Unique Tax Reference (UTR) number – given to you when you register as self-employed.
The last word
To register for CIS and to receive your CIS number both the contractor and the subcontractor have to register with CIS on line or by phone, otherwise the CIS subcontractor will be taxed at the higher rate of 30 per cent.