Subcontractors
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Learn moreWELCOME, WE ARE CISDONE
The Construction Industry Scheme (CIS) is a tax scheme in the UK that applies to payments made by contractors to subcontractors for construction work. The scheme aims to ensure that subcontractors working in the construction industry are paying the correct amount of tax and National Insurance contributions. It also helps HM Revenue & Customs (HMRC) to combat tax evasion and avoid any potential loss of revenue. At CIS Done, we’re here to help subcontractors in the UK handle their taxes without the fuss. Think of us as your go-to team for making tax matters simpler and easier. If you’re a contractor looking for some peace of mind, we’ve got your back.
WHAT IS A
CIS REPAYMENT / REBATE?
Under the CIS scheme, subcontractors have to register with HMRC and are subject to a deduction of 20% from their payments as an advance towards their tax and National Insurance contributions. However, they can also claim back this amount if they meet certain criteria. This is known as a CIS tax refund or CIS tax rebate.
Some of the main benefits of making CIS tax claims include:
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Reduction in tax liability:
By claiming back the 20% deduction made under the CIS scheme, subcontractors can significantly reduce their overall tax liability.
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Improved cash flow:
The refund of CIS deductions can provide subcontractors with additional cash flow, which can be reinvested into their business or used for personal expenses.
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Compliance with tax regulations:
Making CIS tax claims ensures that subcontractors are complying with the rules and regulations set by HMRC, reducing their risk of facing penalties or fines for non-compliance.
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Greater financial stability:
By properly managing and claiming back CIS tax deductions, subcontractors can improve their financial stability and plan for future expenses.
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Enhanced reputation:
Registering for the CIS scheme and making regular tax claims can enhance a subcontractor’s reputation by showcasing their compliance with tax laws and responsible financial management.
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Potential for higher earnings:
By accurately keeping track of CIS deductions and making timely claims, subcontractors can potentially increase their earnings and profits.
Estimated average repayment of £2,750
KEY RULES AND
RESPONSIBILITES
The key rules and responsibilities that contractors in the UK construction industry need to adhere to under the Construction Industry Scheme (CIS):
Verification And Subcontractors
Contractors are required to verify the employment status of their subcontractors with HM Revenue & Customs (HMRC) before making payments to them.
Deductions and Payments
Contractors are responsible for deducting the appropriate amount from the payments made to subcontractors and then sending this deducted amount to HMRC.
Monthly Reporting
Contractors need to submit monthly CIS returns to HMRC, detailing the payments made to subcontractors and the deductions made.
Record Keeping
Contractors must maintain accurate records of payments made to subcontractors, the amounts deducted, and other relevant details.
Statements to Subcontractors
Contractors are required to provide statements to their subcontractors, detailing the payments made and the deductions taken.
CIS Deduction Certificates
Contractors must also provide subcontractors with a CIS deduction certificate at the end of the tax year.
Late Filing and Penalties
Contractors are subject to penalties if they fail to file monthly CIS returns on time or if they provide incorrect information.
