The Construction Industry Scheme (CIS) can be complex when it comes to correctly and compliantly calculating your tax and all fulfilling requirements outlined by HMRC.
So, we’ve outlined all everything you need to know about what responsibilities you have as a contractor or sole trader in the construction industry.
The rules.
In line with HMRC’s official guidelines, you must:
- Register for the Construction Industry Scheme (CIS) if you are paying subcontractors to do construction work and spend more than £1 million a year on construction
- Check if those doing work for you should be employed instead of subcontracting, as this could result in a penalty charge of up to £3,000 if the employment status is incorrect
- Make the relevant deductions when paying subcontractors – 20% for registered subcontractors, 30% for unregistered subcontractors and 0% for a subcontractor with gross payment status
- File your monthly returns by the 19th of every month to HMRC after the previous tax month or you’ll receive a penalty charge of £100 for 1 day. £200 for 2 months or £300 for 6 and 12 months
- Keep HMRC informed on any changes made to your business within 90 days, including change of address, a contractor dies, or you take on another contractor’s business
