CIS Construction Industry

Learn about the services accountants can offer those working in the construction industry.

Working in the construction industry requires contractors to register under CIS (Construction Industry Scheme) – once this is done subcontractors are paid minus of 20 percent of there gross income. The 20 percent taken is to cover future liability to income tax and national insurance contributions. If the subcontractor does not register under CIS then the contractor will deduct 30 percent instead.

Occupations covered under the scheme include: grounds workers, carpenters, plant operators, bricklayers, painters and decorators, plumbers, dry liners, mechanics, fitters, electricians and more.

Subcontractors can avoid having tax deducted ‘up-front’ in this manner by registering for ‘gross payment status’ but this requires a clean history of paying tax on time and is limited to a certain turnover.

Due to this, in most cases subcontractors are having too much tax taken in advance and common work-related expenses are not declared. An accountant can compile a tax return to correctly calculate the amount of tax that should be taken by factoring tax free allowances and reduce the liability by maximising the expenses that are used to offset tax too.

Expenses include items such as tools, plant and equipment, telephone, clothing, insurance, office costs, accounting fees, vehicle expenses and accommodation.

In the vast majority of cases this means subcontractors can be looking at large tax refunds, possibly in the thousands, for each tax return they submit. HMRC allows up to four years worth of tax returns to be submitted beyond their due dates so the money can add up.

Services available for landlords include:

  1. CIS Construction Industry
  2. Self Assessment Tax Return

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