The Construction Industry Scheme (CIS) is a tax scheme designed for contractors and subcontractors working in the construction industry in the United Kingdom. Under CIS, contractors are required to deduct money from a subcontractor’s payment and pass it on to HM Revenue and Customs (HMRC) as an advance payment towards the subcontractor’s tax and National Insurance contributions.
Below we will look at how businesses can register for CIS.
Check if your business needs to register for CIS.
Not all businesses in the construction industry are required to register for CIS. However, you’ll need to register if your business pays subcontractors to do construction work. The definition of construction work under CIS is broad and includes activities like alterations, repairs, installations, and demolitions. You can find more information on the types of work that fall under CIS on the HMRC website – www.gov.uk/what-you-must-do-as-a-cis-contractor/how-to-register
Gather the necessary information.
Before starting the registration process, you’ll need to gather information about your business. This includes your Unique Taxpayer Reference (UTR) and your National Insurance number if you’re a sole trader. If you’re registering as a limited company, you’ll need your company registration number and your company’s registered address.
Register for CIS
You can register for CIS online through the HMRC website. The process is straightforward and should take about 10 minutes to complete. You’ll need to provide your business details, including your name, address, contact information, and information about your business activities.
Wait for confirmation.
Once you’ve submitted your registration, HMRC will review your application and confirm whether you’re registered for CIS. This usually takes around two weeks. Once registered, you’ll receive a letter from HMRC with your CIS registration number.
Set up your payment system.
After registering for CIS, you must set up your payment system. As a contractor, you’ll be responsible for deducting money from your subcontractors’ payments and passing it on to HMRC. You’ll need to complete a monthly return and pay HMRC by 19th of each month which will include details of all payments to subcontractors within that period, so setting up a system is essential to make the process as efficient as possible and meet your regulatory deadlines.
In conclusion, registering for CIS is a straightforward process, but it’s important to ensure you have all the necessary information before starting and know your filing obligations with HMRC. Once registered, you’ll need to ensure you’re deducting and paying the correct amount of tax and National Insurance contributions to HMRC. If you need clarification on any aspect of CIS, it’s a good idea to seek advice from a tax professional or accountant.
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