CIS covers most construction work to buildings, including site preparation, decorating and refurbishment. You must register as a contractor if:
- you pay subcontractors for construction work
- your business does not do construction work but you spend an average of more than £1 million a year on construction in any 3 year period
Under CIS, contractors 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.
Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.
You must pay any deductions you have made over monthly (or you can pay quarterly if you pay less than £1500 per month) to HMRC. If you already have employees you should make one payment per month and pay of the CIS deduction along with your PAYE.
If you are a contractor or subcontractor and need assistance in regards to CIS then please contact us.