Construction Industry Scheme (CIS)

The Construction Industry Scheme (‘CIS’) is an initiative for those working in the construction industry, though businesses outside of the sector are also counted as contractors from time-to-time. The scheme is applied to a wide range of construction companies and organisations, including self-employed contractors and sole traders, companies, partnerships and LLPs. In addition, it also can apply to labour agencies, contracting intermediaries, property developers and more.

How can Aspire help?

At Aspire, we can provide a wealth of services related to the CIS scheme, including:

  • Operational compliance
  • Advice on the scope of the CIS
  • Making CIS deductions
  • Verifying subcontractors
  • Completing your monthly returns
  • Employment status reviews
  • Appealing CIS penalties
  • CITB Levy
  • Gross status application and revocation
  • Training for internal staff or sub-contractors
  • HMRC CIS interventions
  • Ad-hoc technical advice and updates

Aspire will provide you with the support you need if you are struggling to understand your obligations as a contractor and/or sub-contractor as compliance with the CIS is vital, particularly for those with gross payment status as its revocation is often detrimental to a business, both reputationally and financially. Our services are designed to help you become compliant and avoid compromising your reputation or financial well-being. We can provide you with accurate, up-to-date advice to help you meet your business challenges and can assist you with regulatory interventions and employment status disputes.

Scope of CIS

The scheme normally includes any work carried out on permanent buildings, temporary structures, civil engineering work and installations. Work within the scope of CIS can include demolition, dismantling, repairs, refurbishments, repairs, extensions, alterations, plastering, roofing and bricklaying. The term ‘construction’ can refer to the building, making, assembling things and putting them together, so the definition has been clearly outlined.

What are ‘contractors’ and ‘sub-contractors’?

Contractors are deemed to be anyone who pays sub-contractors for carrying out construction duties, not including homeowners employing people to renovate or build new homes. Sub-contractors are those that carry out the work for contractors and are also expected to register with HMRC. Contractors may make monthly returns to HMRC and must even inform HMRC if they don’t pay any subcontractors in a month to avoid automated penalties (or submit a voluntary nil return). It is possible to be both a contractor and a sub-contractor and so, you would be expected to register as both if this applies.

CIS deductions

The CIS was created to ensure tax on payments for construction is deducted at source. It doesn’t cover payments made to employees, as their payments are covered by PAYE. The recipient’s status determines the rate of tax payable.

Sub-contractors need to meet business, turnover and compliance tests to receive gross payments from their contractor. Should sub-contractors find they are ineligible to qualify for gross payments after failing at least one of the three tests, they are still able to register with HMRC in order for deductions to be made at the 20% lower rate rather than 30%.

Getting in touch

Aspire have years of experience to draw upon regarding the Construction Industry Scheme ('CIS') and are able to provide clear, coherent advice to help your business make the right key decisions. To take advantage of our vast experience and expertise, call us today on 0121 445 6178 or drop us an email at: Alternatively, get in touch via the contact us form on our website.

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