The Construction Industry Scheme (CIS) is a UK government-run scheme that's essential for contractors within the building sector for the payment of sub-contractors' wages and other construction industry costs.
You will need to formally register for CIS before taking on any sub-contractors, and your business can be a limited company, sole trader or partnership. One essential requirement to follow is that before taking on any sub-contractors you need to verify that these workers should not be employed directly as workers for your business.
Ideally, all sub-contractors you take on should be registered for CIS and you will need to verify this with HMRC when you initially appoint them. Any payments you make to sub-contractors should include deductions which will go towards the National Insurance and income tax they need to make at the year end. Where your sub-contractors are not registered for CIS you will need to make higher deductions from any income that's due. These deductions will need sending on to HMRC along with your regular monthly return. You will also be required to keep full records of the way in which you administer CIS. It's quick and easy to file monthly CIS returns via the government website.
Contractor businesses include any business that employs sub-contractors for building and construction work. You will also need to apply for CIS if your business does not carry out building works but spent more than £1m on construction costs over any three year period.
Sub-contractors should register for CIS if they carry out any building works for contractors.
The definition of construction works includes any work carried out on:
When it comes to the types of work covered by CIS, you are classed as a contractor if you take on sub-contractors for:
Some professions are exempt from any requirement to register for CIS and these include:
Some other considerations for CIS contractors/subcontractors include:
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