What is the Construction Industry Scheme?

The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.

The scheme applies mainly to contractors and subcontractors in mainstream construction work, however businesses or organisations whose core activity isn't construction but have a high annual spend on construction may also count as contractors and fall under the scheme.

The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry.  Businesses in the construction industry are known as ‘contractors’ and ‘subcontractors’. They may be companies, partnerships or self-employed individuals.

The CIS applies to construction work and also jobs such as alterations, repairs, decorating and demolition.

There have been fundamental changes to the CIS and this factsheet details the rules which apply from 6 April 2007.

Contractors and subcontractors

Contractors include construction companies and building firms and also government departments and local authorities. Any other business spending more than £1 million a year on construction is classed as a contractor for the purposes of the CIS.

Subcontractors are those businesses that carry out work for contractors.

Many businesses act as both contractors and subcontractors.

Monthly Returns

Contractors have to make a monthly return to HMRC:

• Confirming that the employment status of subcontractors has been considered
• Confirming that the verification process has been correctly dealt with
• Detailing payments made to all subcontractors and detailing any deductions of tax made from those payments.

What we do for you:

• Register with HM Revenue and Customs
• Verify your subcontractors to make sure they are registered with HMRC
• File monthly CIS returns with HMRC
• Claim your CIS tax incurred through your company P35 or through your personal tax return
• Supply yearly statements to subcontractors
• Provide a free web based accounting system to work on

In addition to above we do the following

• Quarterly VAT returns
• Yearend statutory accounts for HMRC and Companies house
• Quarterly PAYE returns
• Quarterly management accounts