Chichester Bookkeeper

Call : 01243 201 401
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B for Bookkeeping
“Enabling you to do what you do best”

CIS Bookkeeping

We can run your CIS bookkeeping for you.

We will produce your monthly CIS300 return and provide you the subcontractor certificates.

Our Prices start at £35 per month, call to discuss your CIS and Bookkeeping needs

"Thank you so much for your help today, invaluable, you work so FAST!"

 Envision Electrical Ltd

Drop-in for a coffee or call to to discuss your business needs

 


We would love to hear your bookkeeping challenges!

Call the office on 01243 201 401 to arrange an appointment.

What is the Construction Industry Scheme?

The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for work in the construction industry must be handled.

Check out HMRC's guide to see if it applies to you - http://www.hmrc.gov.uk/cis/intro/decide-if-cis.htm

As a contractor you must:

  • register for CIS
  • check your subcontractors are registered with HMRC
  • pay subcontractors accordingly
  • submit monthly CIS returns
  • Pay CIS to HMRC

As a Subcontractor you must register with HMRC, if you are not registered, contractors have to deduct the higher 30% rate, instead of the registered 20% rate off your invoice.

 

Running a Limited Company under CIS

You can offset your CIS deductions taken from payments received against:

  • any PAYE payments due to HMRC
  • your Class 1 National insurance contributions
  • CIS deductions the company has made from its own subcontractors

HMRC will repay any deductions that the company is not able to offset against its PAYE liabilities

This is done at the end of the tax year when the company submits its Employer's Annual Return (P35).

 

Offsetting your Monthly or Quarterly CIS liabilities

Each month or quarter you should offset your CIS liabilities against your PAYE/NICs payments.  This will either reduce your CIS payments or eliminate it fully!

If your liability is reduced to nil and there are still some unused CIS deductions that have not been offset, you should carry these forward to the next month or quarter within the same tax year and don't forget to tell HMRC that you have no liability to pay over for that period.

If the company's CIS deductions available for offset in any month or quarter do not cover the whole of the company's liability for that period you must pay over the balance to HMRC by the usual payment date.

 

Using the P35 Employer Annual Return to reclaim your deductions taken form payments

If you are a limited company and have had CIS deductions taken from your payments during the tax year you'll need to complete a P35 Employer Annual Return.

At the end of the tax year you should account for all CIS deductions made from your payments and offset these against your own liabilities on the P35. 

If you have a repayment due, you must make a request in writing to HMRC for this repayment quoting your employers or accounts office reference. 

Send this request to: HM Revenue & Customs, Employer Office, Room BP4009, Chillingham House, Benton Park View, Newcastle Upon Tyne, NE98 1ZZ

 

CIS Record Keeping

You must keep a record of all the amounts offset against your monthly or quarterly liabilities.

Either use HMRC's CIS132 form - http://www.hmrc.gov.uk/manuals/cisrmanual/pdfs/cis132.pdf or keep your own records.

 

Sign up for CIS

To sign up for the Construction Industry Scheme, please login into HMRC online service to register - https://online.hmrc.gov.uk/login

 

Help with CIS

B4Bookkeeping can help with your CIS management, please call to discuss your requirements

HMRC have a dedicated help line 0845 366 7899 if you get stuck or go online for further assistance

How to calculate paying your Subcontractors

Example 1 : where the subcontractor is due £600 for their work and are verified with HMRC

Gross pay £600

CIS Deduction (£120) - 20% deduction, payable to HMRC

Net payable to subcontractor : £480

 

Example 2 : where the subcontractor is due £600 for their work and are NOT verified with HMRC

Gross pay £600

CIS deduction (£180) - 30% deduction, payable to HMRC

Net payable to subcontractor : £420

Verifying and paying your sub-contractors

When you take on a new sub-contractor, you must verify them with HMRC

So what will you need?

  • their name, or the name of their business or company
  • their UTR - Unique tax reference
  • their National Insurance number (if you know it) if they're a sole trader
  • their company registration number if they're a company

Where to register them:

Use HMRC's Online Services: https://online.hmrc.gov.uk/login

 

What about CIS under RTI?

  • Limited company employers that have CIS deductions taken from their own income will also need to complete an EPS showing these deductions taken for the tax year to date in order to subtract these from the amount of PAYE due to be paid to HMRC.

  • The CIS300 monthly contractor returns will continue unchanged and still need to be completed and submitted monthly as now. Late filing penalties for missing the CIS300 due date will also remain unchanged.

  • The PAYE charge (taken from the FPS returns) and the CIS charge (taken from the CIS300 return) together will form the total charge for the month (after deducting any amounts on EPS returns) and will be compared with what the employer/contractor has paid for that month.

  • CIS deductions taken from limited company subcontractors and shown on the EPS will be offset against the company’s PAYE/CIS liabilities for the year to date, with any excess CIS deductions being carried forward each month until the end of the tax year.

  • Limited companies that have an excess of CIS deductions over and above the amount of tax/NICs/CIS that they are due to pay to HMRC in their capacity as an employer will not be able to claim a repayment of these CIS deductions until:

    • The final FPS for the year has been submitted (due by 19 April each year where payments to employees are made in the period 6 March to 5 April)

    • The company has paid all amounts due to HMRC for the tax year in their capacity as an employer/contractor

    • The tax year in which the CIS deductions were made from the company has ended.

  • If you submit an EPS to report if a nil payment is due for the month, a nil CIS Monthly Return will also still be required.

 

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B4Bookkeeping Ltd

Tel : 01243 201 401

  3 Lincoln House, Chichester Fields, Tangmere, Chichester, West Sussex, PO20 2FS
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