The construction industry in the UK is subject to the Construction Industry Scheme (CIS).
If your company is a contractor, it has an obligation to register as an employer with HMRC and verify subcontractors. In addition, the company is required to make CIS declarations and send tax payments to HMRC and subcontractor’s insurance by the 19th of every month. These rates may be different depending on whether the subcontractors have fulfilled their responsibilities.
When working in the construction industry you should be registered in the CIS. Then your contractor will be able to verify you and deduct the correct amount of tax from your income.
The current value of the deduction is 20% for verified subcontractors and 30% for those not registered in the CIS. Companies that meet additional requirements can apply for the so-called gross payment status. After obtaining such a document, the contractor won’t make deductions from your payments in the CIS.
If your company was awarded a contract in the UK, which is subject to the CIS, you are obliged to report this fact to the HMRC. The registration process for foreign companies is different than for the companies registered in the UK.
If you want to get detailed information about CIS, contact our office.
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