CIS Calculator

What is Construction Industry Scheme?

CIS is an HMRC’s way to collect tax revenue from the business that does construction work, like Subcontractors (Subbies).

Under this scheme, the contractor deducts CIS from the payment to subcontractors and submits details in a monthly return (CIS-300).

How to Comply with the Construction Industry Scheme

Tax evasion is a serious concern, and HMRC is always trying to ensure everyone pays the right amount of taxes they owe. One of these schemes is the Construction Industry Scheme (CIS), aimed at businesses operating in the construction industry. There are quite a few roles and responsibilities associated with CIS, and contractors and subcontractors should be familiar with it.

Who Needs to Register for CIS?

To avoid paying penalties for non-compliance, contractors and subcontractors working in the construction industry are required to register for CIS. There are, however, some differences in the requirements depending on whether you are a contractor or a subcontractor.

As a mainstream or deemed contractor, one must register for CIS without fail. Subcontractors, however, have the option to choose whether or not they want to register for CIS. Furthermore, for businesses that act both as a contractor and subcontractors, it is imperative to register under CIS.

What are Your Responsibilities Under CIS?

Depending on whether you are a contractor or a subcontractor, you may have slight differences in your responsibilities. The duties for each are listed below:

Contractor:

• Confirm Subcontractor’s Employment Status
• Verify Subcontractors
• Make CIS Deductions from Payments
• Submit monthly CIS Returns
• Maintain Records

Subcontractor:

• Register with HMRC
• Apply for Gross Payment Status
• Keep Records

Contractor CIS Non-compliance: Impacts

Late payment penalties and late payment interest will be levied if contractors do not file monthly CIS return and pay CIS deduction to HMRC respectively. You can find out your gross payment, CIS deduction, tax rebate and VAT amount with our CIS calculator.