
Are you clicking into numerous links trying to find a blog that will explain to you what construction industry scheme is? Well after reading this blog, you won't be clicking anymore! Read on to find out what does CIS mean?
Definition of Construction Industry Scheme (CIS)
This is a tax deduction scheme that requires contractors to deduct money from a subcontractor’s wage. It is a requirement by the HMRC's tax rules and regulations and mandatory to comply with.Who does CIS apply to?
Contractors who use subcontractors must register for Construction Industry Scheme. National insurance and tax obligations are deducted at a lower rate of 20% for subcontractors if they are registered under the construction industry scheme. However, as it is not mandatory for subcontractors to register they may be taxed at a higher rate of up to 30%.What does CIS cover?
CIS covers construction work that is set in a contract for example:- Site preparation,
- Alterations,
- Repairs,
- Decorating,
- Demolition,
- Cleaning
- Dismantling
How to register under CIS?
A business that wants to act as a contractor and use subcontractors for their construction work must register for Construction Industry Scheme. Businesses and subcontractors can do this online via the HMRC website. Similarly, subcontractors can also register if they wish to do so as it is highly recommended.How can Happie Group help you?
Happie Group CIS will handle all the paperwork for the business. As a result, the business won't have to worry about HMRC's rules and regulations. Therefore, the business can continue to have the freedom and flexibility and improving the quality of what they do.
Additionally, Happie Group will ensure a business is CIS compliant and will work on behalf by invoicing the end client and produce pay advice.
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