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Construction Industry Scheme

Tax must be deducted from a subcontractor before any payments are made and a CIS return must be submitted for each tax month.

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Compliance

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Your key contact

Jamie Snell

Director of Client Finance

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Complying with the Construction Industry Scheme

The Construction Industry Scheme (CIS) is a scheme designed by HMRC to minimise tax evasion within the construction industry.

CIS applies to all payments made by a contractor to a subcontractor under a construction contract.

Tax must be deducted from a subcontractor before any payments are made and a CIS return must be submitted for each tax month.

"CIS rules are complex and the penalties are real. We make sure nothing slips through the cracks."
Karen Coult
Client Finance Partner

Why should I prepare a CIS return?

It's a UK statutory requirement

  • If you are a contractor and you hire subcontractors to undertake any of the following work:

    • preparing the site, e.g. laying foundations and providing access works 
    • demolition and dismantling
    • building work
    • alterations, repairs and decorating
    • installing systems for heating, lighting, power, water and ventilation
    • cleaning the inside of buildings after construction work


    … then it is a statutory requirement that you deduct tax from your subcontractors pay and prepare a CIS return on a monthly basis for each tax month.

How do I prepare a CIS return?

Let Caldwell Penn do the hard work for you
  • We have a team of in-house tax experts with vast detailed knowledge of the latest tax legislation who will prepare your CIS returns, ensuring that your business is fully compliant.
  • Your CIS return will be submitted electronically to HMRC on time and hassle free, with the only thing left for you to do is make sure you pay HMRC the required tax, pay your subcontractors the tax deducted amounts and make us aware of any new subcontractors you hire. It’s that simple.
  • The team will also deal with any HMRC enquiries on your behalf leaving you with one less thing to worry about.   
"You focus on the building site. We’ll focus on making sure HMRC is happy and your subcontractors are paid properly."
Caitlyn Evans
Client Finance Partner
"CIS is one of those jobs that always seems small until it goes wrong. Let us handle it so you can carry on with confidence."
Luke Noble
Client Finance Partner

What are the benefits?

Staying compliant without the stress
  • We will give you the confidence that your company is compliant with all legislation and that your subcontractors are being paid the correct amounts.
  • We will free up your time allowing you to concentrate on the more important day-to-day running of your business. 

Your client finance leads

Jamie Snell

Director of Client Finance

Caitlyn Evans

Client Finance Partner

Karen Coult

Client Finance Partner

Luke Noble

Client Finance Partner

Frequently asked questions

The Construction Industry Scheme (CIS) is a scheme designed by HMRC to minimise tax evasion within the construction industry. Tax is deducted at source from the subcontractor by the contractor and then paid over to HMRC on their behalf. CIS rules apply to all payments made by a contractor to a subcontractor for construction work as defined by HMRC.

Contractor:

  • Verify subcontractors
  • Make deductions
  • Submit CIS returns
  • Make payments
  • Send deduction statements

Subcontractors:

  • Verify with the contractor
  • Invoice the contractor
  • Claim deductions
  • Construction
  • Alteration
  • Repair
  • Extension
  • Dismantling & demolition
  • Work forming part of the land
  • Installation of systems
  • Internal & external cleaning
  • Painting & decorating
  • Integral works
  • Preparatory works
  • Finishing activities

VAT and Construction Industry Scheme registered businesses that are connected or linked to end users. If intermediary suppliers buy construction services and re-supply them to a connected or linked end user, without making material alterations to the work, they are also treated as an end user and the Domestic Reverse Charge does not apply.

 

A contractor is a business (limited company, partnership or self-employed individual) that pays subcontractors for construction work. Private householders are not counted as contractors so are not covered by the scheme.

A subcontractor is a business (limited company, partnership or self-employed individual) that carries out construction work for a contractor.

Contractor:

You must register as an employer, before any payments to subcontractors. Please be aware it can take up to 20 working days to receive an employer PAYE reference number. To register online, please click here.

Subcontractor:

To register online please click here. You can also ring the HMRC CIS helpline to register or receive help with the online application: 0300 200 3210.

The aim of the DRC is to reduce fraud within the construction industry; VAT will no longer be paid to the business/individual undertaking the construction service (e.g. subcontractor) and instead it will become the responsibility of the contractor to account for the VAT. 

 

A VAT registered customer who is not intending to undertake further on-going construction services. The Domestic Reverse Charge does not apply for End Users.

 

Our core sectors

Our expertise spans a wide range of industries, with 60% of our client base concentrated in the following core sectors:

Professional Services

Consultants, agencies, engineers, and other specialised firms providing expert professional services.

Technology & Innovation

SaaS companies, crypto businesses, software development firms, and tech start-ups.

Manufacturing & Logistics

Manufacturers, supply chain operators, warehousing businesses, and logistics providers.

While we specialise in these areas, our diverse client portfolio includes businesses across various industries, from retail to construction and manufacturing to hospitality.

No matter your sector, we’re equipped to support your growth and success.

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Trusted by businesses like yours

"Caldwell Penn's transparency, professionalism, attention to detail, and friendliness distinguish them from all other firms we have previously engaged. They have exceeded our expectations by additionally offering R&D advice, which has significantly benefited our operations."
Allaero Limited
"While it’s hard to get excited about an audit, Caldwell Penn made the experience as seamless as possible. Communication was clear and effective, and the management letter provided valuable insights for our business. We highly recommend their services to any business in need of a thorough and efficient audit."
UK Lanyard Makers Ltd
"Caldwell Penn handle everything for us with a proactive, tailored approach. Their dedicated team understands our goals, ensuring we never miss tax-saving opportunities. They’re more than accountants, they’re partners in our growth."
Syon Creative Ltd

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