It’s unlikely you got into construction to spend time crunching numbers and wading through tax law. So why not allow Jameco to take CIS compliance off your hands?
Welcome to Jameco Group, Construction Industry Scheme accountants
The Construction Industry Scheme (CIS) can be a bit of a jungle, causing confusion to many contractors and subcontractors. Its complexity lies in the multitude of rules and regulations involved, covering everything from registration requirements and verification processes to deduction calculations and submission deadlines.
Failing to stay on top of these tasks can result in penalties and delays, making it essential to invest time and effort into mastering the ins and outs of the CIS system. But where do you find the time?
Fortunately, Jameco is well-versed in the finer points of CIS and is here to help you navigate your way through the maze, whether you are a contractor or subcontractor.
Our team of experienced CIS accountants understands the unique challenges faced by construction businesses and can provide a tailored service to help you remain compliant and maximise your profits.
The experts at Jameco can make complying with CIS regulations a breeze, allowing you to get back to the job at hand. Contact us for more information.
What is CIS accounting?
The Construction Industry Scheme (CIS) is a UK government initiative designed to regulate the payment of subcontractors in the construction industry.
Under CIS, contractors deduct money from the payments they make to subcontractors and pay this amount to HM Revenue & Customs (HMRC) as advance payment towards the subcontractors’ tax and National Insurance contributions.
How do CIS deductions work?
The amount deducted from the subcontractor’s payment depends on their tax status. If they are registered as a CIS subcontractor, the contractor will deduct 20% from their payment, which will be paid to HMRC as an advance payment towards the subcontractor’s tax and National Insurance contributions. If the subcontractor is not registered, the contractor must deduct 30% from their payment.
At Jameco Group, our team of experienced CIS accountants can provide expert guidance on complying with CIS regulations, managing subcontractor payments, and minimising your tax liability.
We can help you navigate the complexities of the scheme and ensure that you are meeting all of your obligations as a contractor or subcontractor.
What work falls under CIS?
The Construction Industry Scheme (CIS) applies to all construction work, including building, demolition, and repairs, and covers the labour element of the invoice. Some specific types of construction work that fall under the CIS scheme include:
- Site preparation work, such as groundwork and excavation
- Construction and erection of buildings and structures
- Alterations, additions, and repairs to existing buildings and structures
- Painting and decorating work
- Electrical and plumbing work
- Heating and ventilation work
- Landscape gardening work
- Dredging and land reclamation work
- Installation of security systems and alarm systems
It’s worth noting that CIS applies not just to contractors and subcontractors directly involved in construction work, but also to any business that carries out construction work as part of their activities.
This can include businesses such as architects, surveyors, and engineers. If you’re unsure whether your business falls under the CIS scheme, then please get in touch with our friendly team of CIS accountants.
Our CIS accounting services
- Limited company accounts
- Sole traders accounting
- Corporation Tax
- VAT returns
- Construction Industry Scheme (CIS) tax returns
- CIS self-assessment tax returns
- New company formation
- Management accounts
- Business tax planning
- Personal tax planning
- Xero accounting software
Construction accountants for contractors
As a CIS contractor, it’s essential to have a good understanding of the CIS scheme and its requirements. The scheme can be complex, and it’s important to comply with the regulations to avoid penalties and additional charges.
Working with a specialist CIS accountant can help you ensure that you’re meeting all of your obligations under the scheme.
Registering for CIS – To operate as a CIS contractor, you need to register with HMRC. This involves completing an online form and providing certain information about your business.
Verification – Before you can pay a subcontractor, you must verify their status by checking that they are registered with HMRC for CIS and ensuring that their UTR (Unique Taxpayer Reference) and other details are correct.
Payment and Deductions – As a CIS contractor, you are responsible for deducting the right amount of tax from your subcontractors’ wages and paying it to HMRC.
Reporting – You need to report your CIS payments and deductions to HMRC every month. This involves submitting a monthly return, which details the payments you’ve made to subcontractors and the amount of tax you’ve deducted. At the end of the tax month, you’ll need to issue each subcontractor a CIS deduction statement, which shows the total amount of tax you’ve deducted from their payments.
Working with a specialist CIS accountant can help you to meet your obligations under the scheme and reduce the admin burden.
Construction accountants for subcontractors
As a CIS subcontractor, it’s important to keep on top of your finances and ensure that you are keeping up to date with your tax affairs.
CIS legislation can be complex, and failing to comply with the regulations can result in penalties and additional charges. That’s why it’s important to work with specialist CIS accountants who understand the intricacies of the scheme and can help you navigate it successfully.
Sole Traders – As a self-employed subcontractor, you’ll be expected to save your deduction statements and file an annual self-assessment tax return to report your earnings. This is the form used to keep HMRC informed, report earnings and pay tax. Subcontractor’s payments have tax deducted at source, 20% if they’re registered for CIS, and 30% for unregistered subcontractors. This often results in tax refunds as expenses and the personal allowance haven’t been accounted for at source.
Limited Companies – Subcontractors operating as a limited company mostly work in a similar way, but how they report deductions differs. They report deductions on their monthly PAYE scheme. When it comes to year-end, these deductions net off against their Corporation Tax return rather than their personal tax returns.
Can I apply for gross payment status?
It’s no surprise that the Construction Industry Scheme has strict regulations around deductions, and providing false information can result in fines from HMRC.
To qualify for gross payment status, you must fulfil certain criteria, as set out by HMRC:
- Demonstrate that you have been tax compliant by paying tax and National Insurance on time
- Have a construction-related business based in the UK
- Have a bank account linked to your business
- Turnover test:
- As a sole trader, you must have a turnover of at least £30,000
- As a partnership, a turnover of at least £30,000 for each partner
- As a limited company, the annual turnover must be at least £30,000 for each director or a minimum of £100,000 for the entire company. If your company is controlled by five or fewer people, each person must have a turnover of at least £30,000 per year.
Why choose Jameco Group as your dedicated CIS accountant?
At Jameco Group, we understand that managing your CIS accounting can be a real head-scratcher and can eat away at your precious time. That’s why we offer a range of cost-effective accounting packages designed to help you stay compliant with CIS regulations and maximise your profits.
Here are just some of the reasons to choose us as your CIS accountants:
Think of professional bookkeeping and other accountancy services not as an expense but as an investment. While Jameco is not a budget firm, we offer competitive monthly fees and deliver a high quality of service that every ambitious construction company or subcontractor deserves.
Our team of expert CIS accountants all hold relevant degrees or professional qualifications across a number of chartered bodies. We firmly believe in in-house talent, and we never outsource work in the UK or overseas. With years of experience working with clients in the construction industry, we have the expertise and knowledge to help you navigate the complexities of CIS.
When you work with Jameco Group, you can expect large firm expertise but with a small firm approach to personal service. We will be your trusted business partners from day one, and you will be assigned your own dedicated accountant who will get to know you and your business in order to provide a truly personal service.
Our business has been built on trust, talent and results. Over 50% of our clients have been referred to us, which we think speaks volumes. Add to that our experience, personal approach and cost-effective accounting packages, and that is what makes Jameco Group a great choice for your CIS accounting need, contact us today.