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Construction Industry Scheme (CIS)
Construction Industry Scheme (CIS)
If your business does construction work, you'll likely need to operate the Construction Industry Scheme (CIS).
Contractors who use subcontractors take deductions from their subbies' payments as advances on their Tax & N.I.
Subcontractors have these deductions made by the contractors they work for, and offset it against their own taxes.
As your accountant, we can operate CIS for Contractors as the party making the deductions, or for Subcontractors where they have CIS withheld.
VAT Domestic Reverse Charge
VAT Domestic Reverse Charge
Introduced in 2021, the VAT Domestic Reverse Charge applies to CIS Contractors and Subcontractors.
Similar to CIS, the Contractor withholds the VAT they would pay to their Subbies for invoices they issue.
The VAT still gets accounted for, but the contractor both pays and claims the VAT on their own VAT return, and the subbie doesn't claim it but never receives the actual VAT amount in payment.
Put simplistically , the Contractor handles their Subbies VAT amounts, paying them to HMRC, on their behalf.
CIS and Domestic Reverse Charge can be complicated and overwhelming.
We will help you to implement it and advise on what you need to do, from either side of the schemes. This includes what your invoices must include, what you have to do before you take on a new subcontractor, what deductions are made and how you pay them or how to claim the withheld taxes.
As for accounting for CIS in your books, completing monthly CIS returns, and issuing subcontractor payslips and statements; we can handle all of that for you.
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