Services & Fees

Although it is possible to deal with HMRC directly as regards the CIS, by far the easiest way to do so is through Payroll software that automatically completes the necessary calculations for you. Such systems can be expensive and time-consuming to set up, and many small and medium-sized businesses have previously thought it unprofitable.

Now though, we’re pleased to offer you our own cloud-based Payroll system, which can handle not only your CIS requirements but also your HR, PAYE, benefits and expenses and payslip functionalities – all at an affordable price. We can also handle your registration, deductions and CIS tax calculations on your behalf. If you’re a contractor, we can handle all your payments for you too, either through our cloud-based system or in the traditional way if you’d prefer, as well as completing your monthly CIS returns.

If your business is defined as a part of the Construction Industry, either as a contractor, subcontractor or industry with a high annual spend on construction, you will need to register for HMRC’s Construction Industry Scheme (CIS).

The obligations and responsibilities are different for each member of the scheme but can be summarised as follows:

Contractors must:

• Verify subcontractors with HMRC. This means ensuring that the subcontractors you pay are self-employed and registered with HMRC.
• Pay subcontractors correctly and in the correct manner – this will be decided by HMRC on a case-by-case basis – and make deductions if required. Deductions will be net; at either the standard rate (20%) or higher rate (30%).
• Pay over deductions to HMRC. This means paying HMRC the value of any deductions you make as detailed in your monthly return.
• Give subcontractors deduction statements where this is required.
• Send CIS returns to HMRC each month.
• Keep proper records.

Subcontractors must:

• Register with HMRC. Failure to do this means that any payments made to you by contractors under the scheme will be subject to a deduction at the higher rate of 30%.
• Decide whether you’re eligible for gross payment. Unless you can prove that your business passes tests of business, turnover and compliance (see here for more details), all payments made to you by contractors under the scheme will be subject to a 20% deduction. Regardless of your payment status, deductions will never be made from payments for VAT, Construction Industry Training Board levy, materials, consumable stores, plant hire and manufacturing or prefabricating materials.
• Pay Tax. Deductions made under the CIS will be counted as upfront payments and offset against tax that you owe based on your SA or Corporation Tax return.