CIS TAX ACCOUNTANTS

In the construction industry if you are self-employed, you have to pay taxes in accordance with the Construction Industry Ordinance. In the CIS, the contractors take money from a subcontractor’s payments and submit it on to HM Revenue and Customs (HMRC). The deductions are considered as a down payment for the subcontractor’s taxes and social security. Entrepreneurs must register for the program. Subcontractors do not need to register.

CIS does not apply if the contractor works for:

• School
• Charity
• Trust
• own commercial property
• Subcontractor’s property and the value of that work is less than £ 1,000.

The contractor usually pay Subcontractor directly, but they can be paid by third-party if they want to. But the contractor must pay them deduction statement within 14 days of the end of each tax month.

Contractors include property, construction companies, non-construction companies that have spent an average of £ 1 million or more on construction over the past three financial years, and some public entities that have spent an average of £ 1 million or more on construction per year on the Three-year period ended March 3.

Yes, you can register for CIS and request a gross payment by calling the CIS Helpline on 0300 200 3210.

If you are already registered as a self-employed person, registering as a subcontractor may only take a few days. If you need to register as a self-employed person, you will need to allow more time. Registering as a freelancer and obtaining a UTR number can take up to 10 days.

The simple answer is no, subcontractors do not have to register, but deductions are taken from their payments at a higher rate if they are not registered.

The standard rate for CIS tax is 20%. This rate can be increase if:

• The contractor does not register with CIS
• The HMRC does not verify you
• Provide wrong information