
The Construction Industry Scheme (CIS) is a set of special rules that affect tax and National Insurance for those working in the construction industry. Businesses in the construction industry are known as 'contractors' and 'subcontractors' and will need to be aware of the tax implications of the scheme.
Under the CIS, contractors are required to deduct money from a subcontractor’s payments and pass it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance liabilities.
Contractors are defined as those who pay subcontractors for construction work or who spent more than £3m on construction a year in the 12 months since they made their first payment.
Subcontractors do not have to register for the CIS, but contractors must deduct 30% from their payments to unregistered subcontractors. The alternative is to register as a CIS subcontractor where a 20% deduction is taken or to apply for gross payment status when the contractor will not make any deductions and the subcontractor is responsible to pay all their tax and National Insurance at the end of the tax year.
The CIS covers most construction work carried out in the UK, including jobs such as:
Exceptions to the definition of construction work includes professional work done by architects and surveyors, carpet fitting, scaffolding hire (with no labour) and work on construction sites that’s clearly not construction. The CIS does not apply to construction work carried on outside the UK.
Miss a tax deadline today and HMRC charges 7.75% a year on the outstanding balance. The Bank of England’s base...
The government’s announcement, made in July by new Prime Minister Andy Burnham as one of his first acts in office,...
For UK taxpayers asking “What happens to my Personal Allowance if I earn over £100,000?”, the answer depends on HMRC’s...
For UK employees, pensioners and employers asking, “What should I put for personal allowances?”, the answer depends on the person’s...
We are increasingly hearing from sole traders and landlords who know that Making Tax Digital started in April but remain...
A landlord can report rental income for several years and still discover that the figures do not match the rent...
We are increasingly approached by people who have traded between tokens for several years but never withdrawn money to a...
In many cases, your pension may not be taxed in the same way as the rest of your estate, but...
Property owners often ask whether they can legally pay zero property tax, particularly after seeing claims about tax-free property companies,...
We are increasingly asked whether the EIS and VCT new limits give growing companies more scope to raise tax-advantaged investments....