If you work for a contractor in the construction industry on a self-employed basis the company is legally obliged to withhold the tax on its payments to you; 20% if you are registered on the HMRC’s CIS (Construction Industry Scheme), 30% if you are unregistered. Therefore, it makes financial sense to be enrolled with the CIS.
In addition, if you are the contractor, you have an obligation to make these tax payments directly to HMRC. Likewise, you will need to file monthly reports, stating payments you’ve made to your subcontractors for the period, either directly through the HMRC online service or utilising commercial CIS software.
Furthermore, unless you submit an ‘inactivity request’ declaring that no sub-contractor payments were made that month, these payments are due every month.
As a contractor, if you are enrolled with the CIS, there are penalties due for filing missed returns. These range from £100 for one day late, to £300 or 5% of the CIS deductions, whichever is higher, for 6-12 months overdue.
The construction and renovation industry in this country has been experiencing boom activity over the last few years and it can be incredibly difficult to keep up with all the changing legislations if you are enrolled with the CIS, whether as a contractor or a sub-contractor. Here at Worthwhile Accountancy, we are experts in all the changing requirements because we deal with these issues on a daily basis.
As a result, our team have the knowledge and capabilities to help with your CIS responsibilities. If you are not yet enrolled with the CIS but are now starting to sub-contract work to other self-employed workers, we can guide you through the process.
Likewise, as someone enrolled with the CIS you may be due a tax refund and are not aware of it. Contact our friendly team at Worthwhile Accountancy to find out more about how we can help you to meet all your tax requirements and make sure you are paying just the right amount.
