CONSTRUCTION TAX. EASE BUILT IN.
The Construction Industry Scheme (CIS) is a tax scheme that helps to ensure that tax is paid on payments made to subcontractors in the construction industry. Under the CIS, contractors are required to deduct 20% from all payments made to subcontractors. This amount is then paid to HMRC.
There are a number of benefits to registering for the CIS. For contractors, the scheme can help to reduce the risk of non-payment of tax, and it can also help to improve cash flow. For subcontractors, the scheme can help to ensure they are paid on time, and can also help to reduce the amount of tax they have to pay.
As tax and accountancy specialists, we can help you to understand the CIS and to register for the scheme. We can also help you to manage your CIS payments and to submit your self-assessment tax return. Above all, we’ll make sure your construction projects are fully compliant, so you can focus on what you do best.
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- What is HMRC CIS Verification?
HMRC CIS verification is a process that allows contractors to verify the identity of subcontractors before making payments. This is important to ensure that payments are made to genuine subcontractors and that tax is paid correctly.
- How can I verify a subcontractor’s identity?
There are a number of ways to verify a subcontractor’s identity, including:
- Checking the subcontractor’s details against the HMRC Construction Industry Scheme (CIS) database
- Requesting a copy of the subcontractor’s CIS registration certificate
- Requesting a copy of the subcontractor’s self-assessment tax return
- What happens if I don’t comply with CIS rules?
If you do not comply with the CIS rules, you may be liable for penalties and interest. You may also be liable for any tax that is not paid by the subcontractor.
- How do you account for CIS in payroll?
When you pay a subcontractor, you have to deduct 20% of the amount for tax. Instead of writing down the full amount in the “Trade Creditors” ledger, write down the amount after the deduction in the “CIS Tax Liability” ledger. This will help you track how much you owe HMRC and make sure your balance sheet is accurate.
- How do I register a company for CIS with HMRC?
To register a company for CIS with HMRC, you will need to complete the CIS305 form. You can find this form on the HMRC website here.
- Do you need to declare materials to HMRC for CIS?
No, you do not need to declare materials to HMRC for CIS. The CIS only applies to payments made for labour.
- Can I claim CIS payments back from HMRC?
Yes, you can claim CIS payments back from HMRC if you have overpaid, by completing a self-assessment tax return and claiming the refund on your return. You’ll need to provide evidence of the payments that you have made, such as invoices or receipts.
You can also claim CIS payments back if you have stopped working in the construction industry. To do this, you’ll need to complete form CIS40 and submit it to HMRC.