Level Accounting

CIS Tax Accountants Lancashire

Whatever your tax accountancy needs may be, Level Accounting can not only offer professional advice, but can handle all of your taxation needs to ensure that you don’t fall out with HMRC.

Based near Lancashire, we are straight talking accountants who will ‘tell it like it is’, going above and beyond to make sure that your business receives any additional refunds that you are entitled to.

What is CIS Tax?

The Construction Industry Scheme, or CIS for short, is a requirement set up by HMRC to ensure that subcontractors do not evade paying tax within the UK construction industry, and to protect them from false employment.

Registered contractors have a responsibility to report subcontractors earnings on a monthly basis to HMRC, as an advance payment towards the subcontractor’s National Insurance and tax. This is normally 20%, but it could be 30% or even zero (gross), depending on what HMRC dictates.

Who needs to register for CIS Tax Deductions?

The construction industry scheme has quite a few rules regarding who and how to deduct tax. It doesn’t matter how you are trading. You could be self employed, working in a partnership or even a limited company.

If you work in the construction industry as a subcontractor; whether that’s on site, or domestic or you have other trades working for you on a self employed basis (you are a contractor); then the chances are you’ll need to be registered for CIS.

What services do level accountants provide for businesses/ contractors operating under CIS?

Level Accounting offers a number of services for CIS. For the self employed subcontractor, we can help complete your self assessment tax returns and submit everything to HMRC, along with chasing any rebate owed.
For the contractor (if you have at least one subcontractor working for you), we can help you calculate and submit your CIS tax deductions, working out the take home pay for your subcontractors and inform you in advance of any payments that need to be made to HMRC.

Finally we can help by verifying any new subcontractors as part of one of our monthly accounting services.

Why choose level accountants for CIS accounting?

We like to work closely with all of our clients, providing a simple and easy service to calculate and submit your CIS. From ensuring each subcontractor is verified, to making sure that you are deducting the correct amounts from your subcontractors and updating HMRC correctly for materials supplied, labour charged, etc, you can rest easy, knowing that we have plenty of experience in the construction field.

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Though they both require regular submissions they are both different tax's. PAYE is used for employees - most people know it as Payroll, or "cards in" as some may say, and the tax payable is dependant on your level of income. You should only pay tax under CIS, however, if you are self-employed.

Under the CIS scheme, there are many important things to keep in mind when it comes to taxation. You will be responsible for paying all your tax throughout the year in quarterly instalments, and National Insurance contributions must also be paid.

Recent changes (domestic reverse charge VAT) have meant that if you are VAT registered, you now have to withhold the VAT charged from any subcontractor invoices that include CIS labour charges, including VAT on materials supplied.

This also works in reverse, so if the work carried out is done under CIS and you are VAT registered, you will no longer be paid the VAT charged on your invoice, instead the contractor will pay it for you.

If you are worried that you may get caught out by these recent changes, then contact us and we will help you navigate the new VAT charges.

Simple answer, yes. HMRC requires a tax return to be submitted to ensure all regulated tax has been properly paid and is accounted for on both ends.

You will need to accurately fill out and submit a CIS self-assessment tax return for illustrative purposes, which shows revenue made, taxed and paid throughout the year.

VAT and CIS are separate taxes and should be applied separately. Either for a materials charge or material supplied applicable to VAT, this must be reconciled on a separate VAT return.

VAT will typically be withheld as normal for a subcontractor verified in the CIS scheme, but as of 2021, this only needs to be accounted for on your VAT return under your output and input boxes.

How we can help you navigate your CIS Tax deductions

Whether you are a contractor or a subcontractor, at Level Accounting our expert CIS accountants can give you peace of mind that your business complies with the complex and ever changing CIS tax rules.

We will help you maximise any potential benefits that you may be entitled to, as well as reducing the risk of late penalties and unnecessary charges. We can process your payments and deduction statements and submit your monthly CIS returns to HMRC on your behalf.

So if you are a Lancashire business looking for additional assistance in questions regarding any of the above-mentioned tax accountancy regulations, please reach out to us for a free consultation.