Construction Industry Scheme (CIS) Accountants
Vtrahe has looked after CIS clients in Birmingham for years, on both sides of the scheme. Sole traders on the tools, small building firms with a handful of subcontractors, and limited company subcontractors who need their deductions back through payroll rather than through a tax return. We work in English or Russian and fees are agreed before we start.
Our CIS-Related Services Include:
- Online verification of subcontractors.
- Electronic filing of contractors monthly returns.
- Submission of annual returns.
CIS Deductions Made Simple
Under CIS, contractors must reduction payments from declarer and pass them to HM Revenue and Customs (HMRC). These subtraction act as promote payments toward the subcontractor’s tax and National Insurance requirement. Vtrahe ensures seamless handling of these deductions, helping both contractors and subcontractors avoid compliance issues. We also provide expert advice on registering for the scheme to minimize tax deductions and streamline operations.
Guidance on CIS Registration
Register as a Contractor:
You must register as a supplier if you hire builder for building work or if your business, even outside the construction sector, spends more than £1 million annually on construction over three years.
Register as a Subcontractor:
If you play construction work for a fixer, you should register as a builder. If you fall under both roles, we recommend enrolling for both. Our experienced accountants will guide you through the entire process to assure smooth registration.
What Work Does CIS Cover?
CIS applies to most construction-related activities, including:
- Site preparation (foundations, access work).
- Demolition and dismantling.
- Installation of systems (heating, lighting, power, water, ventilation).
- Cleaning inside buildings after construction.
- Building, alterations, repairs, and decorating.
- Civil engineering projects (e.g., roads, bridges).
CIS Registration Exemptions
Some activities are exempt from CIS registration, including:
- Scaffolding hire without labor.
- Architecture and surveying.
- Manufacturing construction materials, plant, or machinery.
- Delivering construction materials.
- Carpet fitting.
CIS Tax Return Calculator
Vtrahe offers a CIS tax return calculator to help you manage your tax obligations with ease. With our tools and expertise, we ensure that your business remains compliant and operates efficiently under CIS regulations.
Contact Us Today
Choose Vtrahe, a trusted name in CIS accounting, for reliable and professional services tailored to your business. Visit our CIS Services page to learn more about how we can support you. Let us handle the details, so you can focus on growing your business.
The Construction Industry Scheme (CIS) relates to akin building work on enduring or temporary buildings, construction, and civil engineering projects such as roads and bridges.
What Work Does CIS Cover
- Site preparation, foundations and access works.
- Demolition and dismantling.
- Building, alterations, repairs and decorating.
- Installing heating, lighting, power, water and ventilation.
- Cleaning inside buildings after construction.
- Civil engineering, such as roads and bridges.
CIS Registration Exemptions
- Scaffolding hire without labour.
- Architecture and surveying.
- Manufacturing construction materials, plant or machinery.
- Delivering materials.
- Carpet fitting.
Full detail is in HMRC’s CIS guidance.
With Vtrahe expertise, you’ll receive the right advice to manage your CIS obligations efficiently, ensuring you stay compliant and avoid unnecessary registration.
If you’re in the construction business, subcontracting to other suppliers can make your business model (and accounting) a tad more complex.
What is the Construction Industry Scheme (CIS)?
The Construction Industry Scheme has been set up by HMRC to ensure subcontractors cannot evade tax within the UK construction industry and to protect them from false employment. Under the scheme, registered contractors deduct money from the subcontractor’s payments. This then goes directly to HMRC as advance payment towards the subcontractor’s National Insurance and tax.
So, who has to register? HMRC states you must register as a contractor with the CIS if:
- You pay subcontractors to carry out construction work for you
- You have spent more than £3 million on construction work in 12 months since you made your first payment (even if your business is not construction based)
Your company status doesn’t matter – you might be a sole trader, in a partnership, or have a limited company. And time is of the essence; you must register for CIS before you employ your first subcontractor, not after.
Of course, depending on the nature of your business, you may subcontract your services as well as employ the services of others. If that’s the case, you should register as both a contractor and subcontractor and follow the relevant rules and processes when each scenario arises.
This is why so many firms turn to an accountant and CIS accounting software to make fast work of CIS invoices and deduction statements.
What does CIS cover?
HMRC defines construction work as:
- A permanent or temporary building or structure.
- Civil engineering work like roads and bridges.
For the purposes of the CIS scheme, HMRC states this includes:
- Preparing the site – for example, laying foundations and providing access works.
- Demolition and dismantling.
- Building work.
- Alterations, repairs, and decorating.
- Installing systems for heating, lighting, power, water, and ventilation.
- Cleaning the inside of buildings after construction work.
So, if construction is the business you’re planning to go into, it will likely affect you. There are some exceptions though, so be sure to seek advice or check out the full criteria on the HMRC website before registering.
The Construction Industry Scheme (CIS) Deduction Rates
When it comes to how much tax is to be deducted, there are three eventualities though 20% is standard.
The CIS deduction rates are:
- 20% for registered subcontractors.
- 30% for unregistered subcontractors, providing a big incentive for new subcontractors to register.
- 0% when the subcontractor has ‘gross payment’ status – this means the contractor pays them in full and the subcontractor is responsible for paying all applicable tax and National Insurance on their income at the end of the year via their Self Assessment tax return.
Gross Payment Status
Unsurprisingly, CIS deductions are tightly controlled, and HMRC may fine anyone providing false information. HMRC will check you pass three tests to qualify for gross payment status.
You’ll need to be able to demonstrate that:
- You’re tax compliant i.e: you’ve paid your tax and National Insurance on time to date
- Your business is in construction (work or providing employees for labour) and based in the UK.
- Your business is tied to a bank account.
Additionally, there’s a turnover test. HMRC will inspect your turnover for the last 12 months.
Your turnover (ignoring the cost of raw materials and VAT) must be:
- £30,000 or more for sole traders.
- £30,000 for each partner in a partnership or a minimum of £100,000 for the whole partnership.
- £30,000 for each individual director of the company, or a minimum of £100,000 for the entire company.
Additionally, if your company is ‘controlled by 5 people or fewer’, your company must have an annual turnover of at least £30,000 for each of them.
