Construction Industry Scheme (CIS)
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What is the Construction Industry Scheme?
The Construction Industry Scheme (CIS) is designed to regulate tax payments within the construction sector, ensuring compliance for contractors and subcontractors. Under CIS, contractors must deduct tax at source from subcontractors' payments before passing it to HMRC. This system helps manage tax obligations efficiently and reduces the risk of underpayment. Whether you're a contractor or subcontractor, understanding how CIS affects your payments and tax responsibilities is essential.
Work Covered by the Construction Industry Scheme:
A permanent or temporary building or structure
Civil engineering work (ie: roads & bridges)
Preparing the site - ie: laying foundations
Demolition and dismantling
Building work
Alterations, repairs and decorating
Installing systems for heating, lighting, power, water and ventilation
Cleaning the inside of buildings after construction work
I recently used ABMV to complete my 2024 CIS return after being notified by HMRC that I needed to file a tax return. ABMV guided me through the entire process, ensuring I declared the correct amounts and reclaimed all eligible expenses. The service was efficient, handled promptly, and—best of all—I even received a refund!"
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Construction Industry Scheme (CIS)
Frequently Asked Questions
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CIS is a tax scheme set up by HMRC for contractors and subcontractors in the construction industry. It requires contractors to deduct tax (20% or 30% if the subcontractor is not registered) at source from subcontractors' payments and pass it on to HMRC. This helps ensure that the correct tax is paid upfront.
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If you are a contractor who pays subcontractors for construction work, you must register for CIS.
www.gov.uk/register-employer
If you are a subcontractor who works in the construction industry you need to register for self assessment and choose the 'working as a subcontractor' option when prompted. -
Any tax that has been deducted on your behalf will be offset against your total tax due. This is worked out when filing your personal tax return at the end of the tax year and takes into account all of your incomes. For example, if the total taxes due are £10,000 and you have had £11,000 deducted via CIS you will be due a refund of £1,000. Depending on your personal situation a refund is not always due and more taxes may need to be paid.
take full advantage of the tax-saving opportunities open to you
01732 366077 | admin@abmv.co.uk