- United Kingdom
Construction Industry Scheme (CIS) is a set of rules that is applied to contractors and subcontractors working in the construction sector. It is a tax system which was introduced by HM Revenue and Customs (HMRC) in UK.
This scheme regulates the tax laws and systems in the construction industry. It is mainly applied to contractors and subcontractors working in the construction-related roles. With the help of CIS, proper tax reporting is ensured and there’s reduced risk of tax evasions.
Under CIS, contractors can deduct a percentage of money from the pay of subcontractors and submit it to HMRC. This deduction is considered as an advance payment towards the subcontractor’s National Insurance contributions and income tax.
It is necessary for all businesses to stay compliant with HMRC who are operating under the CIS. At our accounting firm, we take full responsibility for preparation and submission of your CIS Return every month. We make sure that all tax deductions are accurately recorded and reported to HMRC.
HMRC requires verification before you pay to any subcontractor to determine the correct tax deduction rate, whether it's 0%, 20%, 30%. CannyTax performs this verification on your behalf using the online portal of HM Revenue and Customs. We make sure that every subcontractor is registered properly to protect you from incorrect deductions or compliance gaps.
Under the CIS regulations, it is mandatory that every subcontractor receives a monthly payment and deduction statement. Our company prepares and issues these statements for you ease which provides a clear breakdown of payment, deductions that are made as well as net payment. This helps to keep your subcontractors informed throughout the process which builds trust and ensures documents are always ready.
You can get penalties if you miss CIS deadlines or submit incorrect info. Our professionals monitor your filing schedules closely, reviews all your data thoroughly, and handles communication with HMRC. If there are any notices from HMRC, we act and give you peace of mind, protecting your business from severe penalties.
A CIS Return is a report that is submitted every month to HMRC. It works under the Construction Industry Scheme. CIS Return outlines all the payments that are made to subcontractors. It also mentions any tax deductions which are taken from those payments. CIS Return is designed to regulate payments and ensure proper tax compliance.
In addition, CIS Returns should be filed by 19th of every month otherwise you can get penalties and interest charges. Even if there are no payments made during the month, you must file your return.
This process is really stressful and time consuming, especially for small businesses. With other ongoing tasks, they can face difficulties while filing CIS Returns. No need to worry as we have got you covered.
The professional Accountants at our firm are here to help you out throughout the process. From verifying subcontractors with HM Revenue and Customs to calculating tax deductions and filing returns, our team helps you with everything. We also deal directly with HMRC on your behalf and offer proactive tax advice. With affordable costs, you can focus on your construction work with complete peace of mind.
Under the CIS, contractors are required to file CIS Returns legally to HMRC. A contractor can be any person or business who pays subcontractors for construction work. It doesn’t involve only the ones who are in the construction industry.
Individuals who must file CIS Returns are;
Businesses directly involved in building, demolition, renovation, or repair work that hire subcontractors must register as CIS contractors and file monthly returns which details all payments and tax deductions.
Enterprises that manage the development or renovation of residential or commercial properties and hire subcontractors for construction services fall under CIS and must submit CIS Returns.
Agencies that supply tradespeople or labourers to construction sites. Even if the agency doesn’t perform the work itself, they are considered contractors and must comply with CIS filing requirements.
Organisations such as housing associations, councils, and government departments that carry out or commission construction-related work are also required to operate under CIS and file monthly returns.
Companies who do not primarily operate in the construction industry, such as retail chains, utility companies, or manufacturers, may still be treated as a contractor under CIS if they spend £1 million or more per year on construction work for over three years consecutively.
Want to file your CIS Returns peacefully? Our team of qualified Accountants have great experience in managing the tax return process. We will take all the hassle out of submitting a CIS Return.
Our team has a wealth of experience in handling CIS Returns for contractors and subcontractors, so you know you're in safe hands.
We provide end-to-end service, including data entry, submissions, verifications, and generating statements.
Our service is affordable, transparent, and tailored to fit your business needs, without any hidden fees or surprises.
Many contractors and subcontractors in UK trust us to provide accurate, timely, and hassle-free CIS Return services.
Most common mistakes in CIS Returns are as follows;
Wrong UTRs or CIS registration status can give rise to penalties and delays. Hence, for right tax deductions and compliance, it's important to reconfirm the subcontractor details.
Every failure to submit CIS returns on time results in penalties and possible fines. So return submissions timely and avoid extra costs and HMRC-related issues.
The taxes deducted may either be less or more than what should have been. Therefore, proper transaction calculations are essential to ensure correct deduction by HMRC.
Lack of records can lead to HMRC compliance issues and penalties. Hence, for CIS return purposes and any HMRC audits, record-keeping has to be detailed and within the regulatory standards.
All tax deductions will be rejected if CIS status is not verified properly for subcontractors. Proper verification ensures HMRC compliance and ensures that the subcontractor is not an independent contractor.
We begin our process by collecting the records of all payments you've made to the subcontractors. This includes timesheets, invoices, or payment summaries. Our expert team reviews and checks if all the data is accurate and aligned properly.
We then confirm each subcontractor’s registration status and applicable deduction rate with HMRC. We ensure that you're applying the right deduction rates and maintain complete compliance. This step plays a crucial role for preventing errors and future disputes.
The next step is the submission of CIS Return to HMRC. We prepare your monthly CIS Return and file it directly with HMRC. We double-check every detail to make sure that the numbers and deductions are accurate and all the deadlines are met.
Once the CIS Return is submitted successfully, we generate individual statements for each subcontractor. These statements are then emailed or posted to your subcontractors which provides them a clear documentation of what was paid and how much tax was deducted. This keeps your professional reputation intact, guarantees transparency, and simplifies bookkeeping for everyone.
The monthly deadline to submit your CIS Return is the 19th of every month, following the end of tax months. You have to meet the deadlines otherwise you'll get penalties.
If you file late, HMRC will issue you penalties depending on the time period till which CIS Returns are delayed. It will result in additional scrutiny from HMRC and have an impact on your compliance status.
Yes, you must verify every subcontractor with HMRC before making their first payment. Proper verification ensures that you are applying the correct deduction rate.
If you are no longer using subcontractors, you should notify HMRC. You can file a nil return or call them so that they can change your contractor status. If you're unable to notify them, HMRC will expect monthly returns and may impose penalties for non-submission.
