The Construction Industry Scheme (CIS) is a HMRC initiative where, if you work on a self-employed basis for a contractor in the construction industry (not as an employee), CIS rules state that the contractor needs to withhold tax payments from you at a rate of either 20% if you are registered or 30% if you are not. This is a slightly different set-up to other self-employed professionals who would receive gross payments with no tax is deducted.
It is not just typical construction work that the CIS covers, it can also include site clearing, repairs, demolition and decorating. The HMRC website has a very useful breakdown on what is included for the CIS – https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr14000.
Anybody operating under the CIS needs to accept that, if construction services are delivered directly to a homeowner, then this work is outside of the scheme’s remit and customers will need a gross bill with no tax exclusions.
In essence you should register for CIS if:
- You are acting as a contractor and using the services of self-employed professionals to complete construction work
- You are acting as a self-employed professional offering construction services
If you have any questions in regards to CIS then our team would be delighted to help, please call us on 01173 700 079 or e-mail email@example.com.