Quick and Easy CIS Registration

The Construction Industry Scheme (CIS) covers a wide range of construction work including:

1. Site preparation. This includes any demolition or dismantling, site clearance, excavation, and the construction of roads and foundations.
2. Main construction work. This includes general construction of commercial and domestic buildings, alterations, repairs, extensions, and renovation. It also covers decorating and painting.
3. Installation work. This involves installing systems such as heating, lighting, power, water, and ventilation.
4. Finishing work. This can include things like decorating the inside or the outside of any building or structure.
5. Cleaning work. Cleaning the inside of buildings after construction work has taken place is also covered.

However, certain jobs that are exempt from CIS. These include architecture and surveying, carpet fitting, delivering materials, scaffolding hire (with no labour) and making materials used in construction including plant and machinery.

A CIS contractor is a business or individual who pays sub-contractors to carry out construction work.

A contractor is required to register under the Construction Industry Scheme (CIS):

• If they directly pay sub-contractors to do construction work. This is typical for a ‘mainstream’ contractor. Examples include: builders, labour agencies, property developers.
• If the contractor business does not do construction work, but they have spent more than £3 million on construction within the previous 12 month period. This is typical for a ‘deemed’ contractor and could apply to government departments and local authorities.

Private householders, charity or trusts are not counted as contractors, so are not covered by the CIS scheme.

Under the CIS, contractors are responsible for deducting money from their sub-contractors' payments and paying it directly to HM Revenue and Customs (HMRC) as advance tax payments. CIS contractors are also required to file monthly returns with HMRC, reporting details of the payments they have made to their sub-contractors.

A CIS sub-contractor is a self-employed individual or a business carrying out construction work for a CIS-registered contractor.

Under CIS, sub-contractors have money deducted from their payments by the CIS registered contractor, which is then paid directly to HM Revenue and Customs (HMRC) as advance tax payments.

Deduction rates:

• 20% (payment under deduction) or zero (gross payment status) if you are a CIS-registered subcontractor.
• 30% if you are not registered.

Sub-contractors must file annual tax returns with HMRC, reporting their income and expenses. The sub-contractor can claim credit for these deductions against their tax bill at the end of the tax year.

A CIS rebate is a refund of the Construction Industry Scheme (CIS) tax that you have overpaid to HMRC as a sub-contractor.

The refund amount is calculated based on the amount of tax that has been deducted from your payments by contractors, and the expenses that you have incurred in the course of your work.

If you are a self employed sub-contractor use our platform to calculate how much you can reclaim and file your tax return with HMRC!

As a self employed CIS sub-contractor, you can include various business expenses in your rebate claim, such as:

1. Materials and equipment costs.
2. Travel expenses(including fuel costs, public transport fares, and accommodation costs).
3. Tools and equipment purchase and maintenance costs.
4. Clothing expenses (such as protective gear or uniforms).
5. Professional fees(such as accountant or legal fees).
6. Training and education costs.
7. Advertising and marketing expenses.
8. Office expenses (such as rent, phone bills, and internet costs).

It's important to keep hold of all receipts and other accurate records of your expenses. This ensures that you can claim everything you're entitled to and avoid any discrepancies or issues with HMRC. According to HMRC, it is recommended that you keep your business records for at least 5 years after the 31st of January submission deadline of the relevant tax year.

Some expenses are not eligible for a CIS rebate. These include:

1. Personal expenses, such as food and drink, unless they are incurred while traveling for business purposes.
2. Private healthcare costs or medical treatments.
3. Fines or penalties for breaking the law.
4. Clothing not considered necessary for work purposes, such as casual wear or non-uniform clothing.
5. Capital expenses, such as the purchase of a new van or office equipment, which would need to be claimed through capital allowances instead.
6. Travel costs between home and work – these are considered personal expenses.
7. Entertainment expenses, such as meals or tickets to events – unless they are necessary for business purposes.

The CIS gross payment status is a CIS scheme designed for sub-contractors.

Once a sub-contractor has successfully applied for CIS Gross Payment status, the contractor will pay them in full without any tax deductions. However, sub-contractors will be responsible of paying Income Tax, National Insurance or Corporation Tax when filing their tax return.

Here are the main benefits of CIS Gross Payment Status for sub-contractors:

• Higher income. Payments received in gross, without tax and National Insurance deductions.
• Better reputation. The CIS Gross payment status demonstrates financial stability and trustworthiness of a sub-contractor.
• Increased competitiveness. The Gross payment status indicates compliance with tax and employment laws and the contractor is more likely to give the project to a reputable sub-contractor.
• Improved cash flow. The CIS Sub-contractor has more control over cash flow and a better financial management.

In order to apply for CIS Gross status under the Construction Industry Scheme (CIS), a business must meet certain turnover and compliance tests.

You’ll need to demonstrate that:

• You’ve paid your tax and National Insurance on time in the past.
• Your business does construction work (or provides labour for it) in the UK.
• Your business is run through a bank account.

Your turnover for the last 12 months, excluding VAT and the cost of materials, must be at least:

• £30,000 if you’re a sole trader
• £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
• £30,000 for each director of a company, or at least £100,000 for the whole company

If your company is controlled by 5 people or fewer, you must have an annual turnover of £30,000 for each of them.

The registration process for CIS can take 5-10 working days to complete. Once your application to register for CIS is approved, you will receive a confirmation letter from HMRC.