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CIS & Sub Contractors

Under the Construction Industry Scheme, contractors deduct money from a subcontractor’s payments and pass it to HMRC. The deductions are normally 20% of the labour element, provided HMRC have been able to verify the subcontractor. The tax deductions count as advance payments towards the subcontractor’s tax and National Insurance.

Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate of 30% if they’re not registered. You must register as both if you fall under both categories.

Knowing when to deduct CIS and when to report & pay to HMRC are all key to understanding your obligations. We can discuss your needs and liaise with HMRC on your behalf.

Work covered by CIS

CIS covers most construction work to:

•    a permanent or temporary building or structure

•    civil engineering work like roads and bridges

For the purpose of CIS, construction work includes:

•    preparing the site, eg 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

Work not classed as construction

The following are examples of jobs that do not fall under CIS, so you won’t need to register providing this is all you do:

•    architecture and surveying

•    scaffolding hire (with no labour)

•    carpet fitting

•    making materials used in construction including plant and machinery

•    delivering materials

•    work on construction sites that’s clearly not construction, eg running a canteen or       site facilities

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