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Quick and easy: CIS Return for beginners.

Updated: Mar 7, 2022

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CIS stands for Construction Industry Scheme and if you are a contractor or a subcontractor this article interest you. Under this scheme contractors can deduct money from subcontractor’s payments. Said deductions count as advance payments for the subcontractor’s taxes and National Insurance.

Who needs to register? Contractors must register for the scheme, while subcontractors do not have the need, although there are advantages if they are, such as the rate of the deduction being higher than if you are not register. But now the question is whether your company should register as a contractor or as a subcontractor. It is pretty easy, if you pay subcontractors for construction work or if your business, even if it is not related to construction work, has spent more than £3 million on construction in the 12 months since you made your first payment, you’ll need to register as a contractor. You’ll only need to register as a subcontractor if you do construction work for a contractor.

The CIS returns must be done monthly and submitted to the HMRC. The deadline to submitted is the 19th of every month. It is convenient that you provide to your subcontractors a CIS statement, although you only need to give one if you make deductions from their pay. Subcontractors can be benefitted as they will be able to submit their self-assessment earlier and get some deductions.

The CIS online service also have a system to verify a subcontractor and avoid scams. Which can be very helpful to do your business without unpleasant surprises.

How do I register? To sign in you will need the Government Gateway user ID and password for your business tax account and to have added CIS to your business tax account. Clicking here you will go to the HMRC where you can register not only for CIS, but also for VAT returns or corporation Tax.

It is really important that you submit the right information as you could get fine with up to £3,000. For that reason, it could be useful to have someone professional and experience as Evolveva Solution by your side that you can trust and who can guide you in this laborious process.

Recapitulating, you will need to submit your CIS return every month to the HMRC. You must do it if you are a contractor, and it is recommended that if you are a subcontractor, you enrol the scheme too.

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