CIS (Construction Industry Scheme) is a list of regulations concerning settlements in construction industry. CIS regulates payment scheme between contractors and subcontractors.
Who does CIS settlement concern?
Those settlements concern every construction company working in the UK regardless of business form. This involves self – employed, partnership, Limited Liability Partnership and LTD.
You should register the company in HMRC CIS scheme before start of construction work. Thanks to that you will avoid increased tax amount 30%.
What duties do contractors have?
Every contractor is obligated to register in CIS scheme. He has to check if contractors hired by him have also registered. Accounting office or executor himself has to give special CIS settlement to HMRC every month (till 19th day of the month).
It is worth to remember that construction companies registered in other country have to pay CIS tax for the work performed in the UK.
What duties do subcontractors have?
Subcontractor is every person who provide services for other entrepreneur or copartnership. Every subcontractor is obliged to register its business in CIS scheme before the work commencement. HMRC settlements obtain once a year. Subcontractors give self – assessment deposition, but income tax deposit and insurance contribution have to be counted and payed by the executor.
