Construction contractors across the UK are registered under the government Construction Industry Scheme, which determines how payments made by contractors to subcontractors should be handled.
Government guidance states that payments made by contractors must take a subcontractor’s tax status into account. Contractors may then be required to make a deduction from this payment, which is then paid to HMRC.
All contractors are required to register on the HMRC CIS scheme. This is not a necessity for subcontractors, however they will find that deductions made from their payments will be higher if they are not registered. Deductions made will count as advance payments for a subcontractor’s tax and National Insurance requirements.
The CIS scheme covers the majority of construction work apart from a few exceptions which include:
- Scaffolding hire (if no labour is involved)
- Fitting carpets
- The manufacture of materials used in construction
- Architecture and surveying
- Delivery of materials
- And more
More information on CIS and what it means for contractors and subcontractors can be found here.
Exchequer’s CIS scheme
As you can imagine, the requirements of the Government CIS scheme mean that contractors have a great deal of responsibility to carry out their work compliantly. This ultimately means a significant amount of administrative time, taking contractors away for their core business.
To ensure that contractors remain compliant with HMRC guidelines, Exchequer Solutions offers those working within the construction industry and registered with the government scheme, a specifically designed CIS service.
The service ensures that contractors are free to focus on their contracting work, without the stress of calculating CIS deductions and the paperwork that goes hand in hand. With robust processes in place, the Exchequer team guarantee that each and every contractor will be compliant with regulations and will have, at the end of each tax year, a full record of earnings to make the process of claiming tax back on expenses much simpler.
Are you a contractor burdened with the administrative requirements of CIS? Get in touch with our expert team here at Exchequer Solutions to discover how we can help.