Before wondering what CIS Tax is lets explain what CIS Scheme is first. CIS scheme also known as Construction Industry Scheme, is a scheme set up by HMRC (HM Relations & Customs) for tax requirements between contractors and subcontractors. The main purpose of this scheme is to make it easier for workers in construction to get paid and pay the tax requirements they have. Anyone self-employed, part of a partnership, or a company that works in the construction field has to pay tax under the Construction Industry Scheme. CIS tax refers to all the rules and guidelines that need to be met for the tax to get paid under this scheme to the HMRC and National Insurance.
Registering under CIS tax scheme
Apart from knowing whether this scheme relies upon you or not, you should also make sure to ‘participate’ in it. This simply means registering under CIS tax scheme. Before doing so, you should keep in mind some tips. If you’re a contractor we’re sure that by now you know that you must register because you have to make monthly deductions from your subcontractor’s payments to the HMRC and National Insurance. We will talk about this later on but it is important to know the benefits that being CIS tax registered brings to you. As a subcontractor, this simple registration costs you more than you can imagine. Once you register for CIS tax, your deductions are decreased by 10%. This means that you get about 20% of deductions from the full amount of your payment. And if you still think this is not a big deal, try having a 30% deduction made monthly to you.
CIS Tax Services
To understand everything better, we have to go deeper into CIS tax services. What are deductions and why are they made to you? Deductions are made from your payments to help you on paying your yearly tax requirements. As a subcontractor and CIS tax registered you are not responsible for anything related to tax requirements as your contractor must deal with everything tax related. They are responsible for the monthly deductions and for paying everything to the HMRC. You don’t have to worry about anything. Your contractor should be highly responsible and cautious about every little detail or change. There are different penalties in case of a lower payment or a higher deduction compared to the one that should be made according to CIS tax scheme rules. And when you’re CIS tax registered you have the right to speak up about any misunderstanding or injustice made to you.
As a contractor, you need to be extremely cautious about everything. Every deduction you make is important as it goes to HMRC for income tax and to National Insurance too. Another good thing about CIS tax services is that you and your subcontractors get automatically informed in case of paying too little or too much tax. This avoids misunderstandings and problems later on. And in case you have paid a little too much, don’t worry. Everything gets back to you in form of refunds.
CIS Tax is a simpler alternative
CIS tax scheme might get overwhelming from time to time. Keeping up with all the paperwork needed while making sure everything goes well is stressful and we don’t blame you. Instead, we offer a simpler alternative compared to anything you could find. Simply, Blimey Solutions is the only solution needed. We provide you with a professional team of CIS tax accountants that are ready to help you anytime. They can assist in CIS tax advice and special rules applied to firms operating in the construction industry. We provide a full-service managed accountancy package to help you with your tax requirements. From helping you with your registration to bookkeeping, personal taxes, and subcontractor HMRC deductions for National Insurance and tax purposes, we have a wide range of services ready for you.