CIS (Self-employed) FAQs
If you are not already signed up for the Construction Industry Scheme or want to know what it involves, then please read the following FAQs to make sure you understand how CIS works.
You should find the answers to most of your questions here, but if you have more questions about how to go self-employed with an umbrella company such as ours, then please do call us on 01244 563 133. We’d be happy to help.
I’m thinking of becoming self-employed. What should I do?
The construction industry has its own scheme for people who want to become self-employed contractors and subcontractors, called CIS, or the Construction Industry Scheme. A contractor will deduct money from a subcontractor’s payment, and subsequently pass this payment on to HMRC. These payments act as an advance payment for a subcontractor’s tax and NI.
To apply, you should contact your local HM Revenue and Customs office for your Unique Tax Reference (UTR) and to let them know that you intend to work on a self-employed basis. You should then sign up to the Construction Industry Scheme on the government website.
For help with registering on the government scheme please contact the CIS helpline on 0300 200 3210.
How do I pay tax and National Insurance?
You should pay your Class 2 National Insurance each week directly to HMRC. Log into the online CIS portal to do this – www.hmrc.gov.uk. You will then need to pay Class 4 National Insurance via your annual self-assessment tax return.
Do I get holiday pay if I’m CIS?
As you are self-employed, and not an employee or worker, you do not qualify for holiday pay. You also have no entitlement to sick pay or paternity/maternity pay from us, but you may qualify for payments from the government.
How do I claim expenses if I am registered CIS?
You claim your business expenses when you make your annual self-assessment tax return. Please remember that HMRC may ask to inspect your records at any time so you must keep all your expense receipts for up to six years.
What is self assessment?
This is when you file your tax return for any income you have received from self-employed earnings or other sources during the year. You must file your self-assessment form on or before 31 January after the end of the relevant tax year, which runs from 6 April to the following 5 April. In your return you must declare all your income and claim any business expenses incurred during the same tax year, and if you miss this deadline you will be fined.
HMRC calculates the amount of tax you owe based on your personal taxable profit. The monthly on account payments we make for you will offset the tax you owe so you may receive a tax refund if tax deducted is greater than the amount owed.
If you need accountancy advice, we can recommend our specialist accountancy firm, Exchequer Accountancy Services, and organise a discounted fee for you. Please visit http://www.exchequeraccountancy.co.uk/ for more details.
What are your margins when I work for you on a CIS basis?
Our margins are easy to understand, visit our margins page for full details.
How long do I have to stay with you?
You can work for us for as little or as long as you require. Our team are here to help you each step of the way.
Have some further questions? We would be more than happy to help. Contact our team today for further information on CIS.