What is Construction Industry Scheme (CIS)?
Well, this is a scheme by the HMRC which applies to you only if you are an independent subcontractor and work for a contractor in the construction industry. Under this scheme, contractors deduct a certain amount of money from the payment of these subcontractors and then pay the deducted amount to the HMRC. In short, HMRC uses the construction industry scheme for tax collection from the subcontractors working in the construction industry. Even for businesses based out of the country, the same rules apply to contractors and subcontractors if they are carrying out construction work in the UK.
Get An Experienced Accountant For Your Construction Company in the UK
With our ample working experience with residential and commercial builders in and around London, we fully understand the recurrent nature of your construction work and the issues you deal with frequently. So, you have to not worry about the possibility of misappropriated funds, timely preparation of financial statements, supplying statements related to deduction to your subcontractors, and so on. Hire our experienced accountant to take care of all these with utmost sincerity and professionalism. CoreAdviz is an accounting firm with a team of dedicated accountants who are ready to help you at every step. We also acknowledge that HMRC may love to inspect all the specific details of the individuals working for your construction company. So you may be required to provide their names, addresses, and other details! Now, this can be time-consuming and should be best left to the accountants.
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Get Your CIS Tax Return Filed By Experienced Accountants
Isn’t it strange that you’re losing about 20 per cent of your payment to the HMRC even before you received it? This happens under the construction industry scheme. However, the good news is that you can claim a refund of CIS deductions if you end up paying too much taxes or National Insurance Contribution. As this 20 per cent is not based on any tax code, you can claim a refund of CIS deductions if you end up paying too much taxes or National Insurance Contribution by a Self Assessment tax return submission. This can prove to be too hectic as the tax is specific to the construction industry. So, get an experienced accountant from CoreAdviz to file your CIS tax return on time and reap the benefits.
Yes, if you are a contractor who pays the subcontractors for construction work in the United Kingdom, you must register for CIS. Also if you have spent more than £3 million within a year on construction, you need to register as a contractor for CIS.
It may take HMRC approximately 4 to 10 weeks to process and then eventually pay the rebate. So, if you are a subcontractor and do not want that your contractor deducts some payment in advance, you can apply for the gross payment status.
You can apply for the gross payment status when you register for the construction industry scheme or on another date after successful CIS registration by calling the CIS helpline and filling out an online form.
You must file a Self Assessment Tax return provided you work under the CIS. HMRC will then reconcile your refund as part of this tax return.
Although this is not mandatory, deductions can be made at a 30 % rate instead of 20% from their payments. This practice encourages the subcontractor to contact HMRC and get registered soon.
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Accounting for eCommerce package starts at £45 per month
Our Guidance on the “To do list”
As accounting consultants for an eCommerce business, we would suggest you with the following
Standard accounting procedure
The inflow of funds can be recorded when a bill is raised or the actual amount is received. Maintain a single standard throughout
Keep your invoices organized
Invoices play an important role in determining your tax liability. Keeping them organized and chronologically minimizes the changes of computation errors.
Keep your tax records handy
Tax invoices and receipts of the last 5 years are required to be preserved. In case the HMRC wants to verify data, they will ask for previous receipts.
Know your company’s status
As an entity your taxation will depend on your size. If your eCommerce is a private limited company, then its taxation policy will be different from self-employed and partnership.