Construction Industry Scheme: is my work covered?

After research revealed that subcontractors in the construction industry were not declaring all of their tax liabilities, the Government introduced the Construction Industry Scheme (CIS).

Under this scheme, contractors deduct money from subcontractors’ payments and transfer it to HM Revenue and Customs (HMRC), which count as advance payments towards the subcontractor’s tax and National Insurance (NI).

Subcontractors do not have to register for the scheme, as contractors do, but they may be subject to larger cost deductions if they are not registered.

You can register as a contractor if you pay subcontractors for construction work or if your business spends an average of more than £1 million a year on construction within any three years – regardless if your company does construction work or not.

If you do construction work for a contractor, you need to register as a subcontractor.

If you fall under both categories, you can register for both a contractor and a subcontractor.

What construction-related work does the CIS cover?

The CIS covers work like permanent or temporary building or structure, plus civil engineering work, such as bridges and roads. The covered services within these include:

  • Building work
  • Decorating, alterations and repairs
  • Demolition and dismantling of buildings or structures
  • Installing heating, lighting, power, ventilation and water systems
  • Laying foundations and preparing the site
  • Washing and cleaning the inside of buildings after the construction work

By utilising our services at Thompson Wright, we can ensure you have more time on your hands to focus on your business operations.

Our experts have years of experience working within the construction industry, and with contractors. Therefore, we know what assistance businesses like yours need, which is why we offer Comprehensive CIS support.

Our specialist team will ensure you stay on top of and up-to-date with your accounts and compliance obligations, including handling your subcontractors’ tax payments, meeting your Self-Assessment deadlines, helping with business and tax planning, corporate finance, pensions and wealth management – to name a few.

For example, recently we helped a family maintain their assets and property business by assisting in negotiating and restructuring a debt forgiveness settlement.

For more information on our construction services, contact our experts at Thompson Wright today.

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Posted in Blog, PAYE and NI.