Contractors

Are you a contractor or subcontractor under CIS?

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The Construction Industry Scheme (CIS) is a set of special rules for handling payments for construction work that contractors make to subcontractors.

The scheme covers all ‘construction operations’ – construction work – carried out in the UK, as well as some other related work.

Livingstones offer services to both Contractors and Subcontractors.

When are you a subcontractor under CIS?

CIS uses its own special definition of the term subcontractor. So even if you don’t normally think of yourself as a subcontractor, you could be treated as one under CIS.

Under the rules of CIS, you’re a subcontractor if you agree to do construction work for a contractor. It doesn’t matter how you actually carry out the work – you could do it yourself, get your employees to do it, use your own subcontractors or make some other arrangement.

Subcontractors can be self-employed individuals, any type of business, or other bodies and organisations.

When are you a contractor under CIS?

Under the rules of CIS, you’re a contractor if:

  • you run a business that engages subcontractors for construction operations – a ‘mainstream’ contractor
  • you run a business that spends an average of £1 million or more a year over a three year period on construction operations – a ‘deemed’ contractor

Any type of business, including a company, partnership or self-employed individual, can be a CIS contractor. If you are contracted to work in domestic households and you engage subcontractors you are a CIS contractor and will have to operate CIS. However, if you’re a private householder you’re not a contractor, no matter how much you spend.

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What our clients say

They have been patient and helped me avoid some hefty penalties from HMRC.

Michael Husmann,Electrician

What can we offer you?

Contractors

As a contractor, you are required to meet specific obligations under the scheme, including registering with HM Revenue and Customs (HMRC), checking whether your subcontractors are registered with HMRC, paying subcontractors, deducting tax and submitting monthly statements confirming these payments.

Subcontractors

If you are a subcontractor, your main obligation is to register with HMRC. You must also keep HMRC informed of any changes to your business such as changes to your business address, business name, business partners and other relevant information.

Services we provide for subcontractors:

  • Register you with HM Revenue & Customs as a subcontractor
  • Manage and organise your business records – From CIS Vouchers to builders merchant receipts.
  • Prepare your end of year self-assessment tax return and calculate your tax liability/refund where applicable.

If you are self-employed, HMRC will register you as a subcontractor under the CIS scheme and they will set you up to receive payments ‘under deduction’. This means contractors must make a deduction of tax at 20 per cent (30 per cent for unverified subcontractors) from the labour element of your invoices and pay it over to HMRC.

Contact us today for more information on working under the CIS Scheme. We have years of experience so allow us to build your path to the contracting trade.

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We consistently monitor our clients business to make sure they are on the right track. We want every business to flourish, therefore, you hear from Livingstones Accoutants more than just once a year.

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