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CIS Payroll

What are CIS Contracts

What is the Construction Industry Scheme?

 

The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.
The scheme applies mainly to contractors and subcontractors in mainstream construction work, however businesses or organisations whose core activity isn’t construction but have a high annual spend on construction may also count as contractors and fall under the scheme.

Types of work and business structures covered by CIS

 

CIS can apply to all types of businesses that work in the construction industry in the UK. These include:

  • self-employed individuals working as sole traders
  • partnerships
  • companies
  • limited liability partnerships (LLPs)

As well as traditional construction businesses like builders, the scheme can also apply to businesses like:

  • labour agencies and staff bureaux
  • gangmasters – or gang leaders
  • property developers

Even if your business or organisation doesn’t do building work, it might still be a mainstream contractor or HMRC may treat it as a ‘deemed contractor’ – and require it to register with CIS – if it spends more than an average of £1 million a year on construction operations over a three year period. The types of businesses and organisations that this could apply to include:

  • some large businesses
  • housing associations
  • other ‘arms length’ management organisations (ALMOs)
  • local authorities
  • government departments
  • other public bodies

If your business is based outside the UK, the CIS still applies if it does work in the UK – or UK territorial waters – that is covered by the scheme.

 

Already registered

If you are already registered for the current CIS Scheme you must provide Ontime CIS with your Unique Taxpayers Reference or UTR number. It is also the first 10 digits of any CIS card you may have.

If, however, you have not used your CIS status for some time you may have to call the CIS helpline on 0845 366 7899 to re-activate your status.

Registering for the first time

To apply for CIS for the first time you must call the HM Revenue and Customs Self-Employed line on 08459 154 515 and notify them that you are becoming self-employed through the CIS Scheme. They will then issue your UTR number to you through the post. This will then need to be activated by calling the CIS helpline as above

To register as a subcontractor you must have a National Insurance number. If you do not have one please contact the Department for Work and Pensions on Tel 0845 600 0643.

What Tax is deducted ?

Where you have a UTR number then the normal tax rate we deduct at source is 20%.

Where you don’t yet have a UTR number but can provide a National insurance Number then we deduct an emergency type rate of 30%. Any overpayment of tax will be refunded via your year-end tax return.

 

To find out if CIS Payroll applies to you or your business call us on 0113 8267260 or click here to use our online contact form.

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