What is a CIS Return and Who Should File Them?

The Construction Industry Scheme (CIS) was put in place to regulate the payments contractors make to subcontractors. If you’re a construction contractor, you need to complete a CIS return each month to let HMRC know who has been paid. If you’re new to the construction industry or you’ve just started hiring subcontractors in Alcester for your business, this quick guide will give you everything you need to know about your CIS returns.

Who Should Register for CIS?

Any construction contractor that uses subcontractors on any amount of work should register for the CIS with HMRC. Your subcontractors might be self-employed individuals or part of a company, but they should also register under the CIS.

What Responsibilities Do Contractors Have?

CIS contractors are responsible for making sure all subcontractors they employ are verified with HMRC. You are also responsible for submitting a CIS return every month, along with making CIS payments to HMRC.

Verifying subcontractors with HMRC lets you know the subcontractor’s tax status and whether or not they are registered with the scheme.

How Do You Verify a Subcontractor with HMRC?

You’ll need some of your own tax information and that of your subcontractors in order to verify them with HMRC:

• Your Unique Taxpayer Reference (UTR) number.
• Your Employer Reference Number (ERN).
• The Accounts Office reference.
• Your subcontractor’s Unique Taxpayer Reference (UTR) number.
• Their National Insurance number, if they’re a sole trader.
• Their company name, the company registration, and UTR numbers if they’re a company.

Providing all this information ensures you deduct the right amount when paying subcontractors.

How to Complete a Monthly CIS Return

Each month, you’ll need to submit a CIS return with HMRC. To do so, you need to keep detailed financial records that show the amount you pay to subcontractors and any deductions you make.

You can submit your CIS return through the government portal or by using CIS software.

What if I Don’t Use a Subcontractor for a  Month?

You only need to submit a CIS return for the months you hired subcontractors. If you don’t hire someone for a month, you don’t need to worry about filing a CIS return. However, you will need to let HMRC know why you’re not submitting one that month if you usually do.

If you don’t plan on using subcontractors for a few months, you can ask HMRC to mark your account as inactive, which can last for up to six months.

When do I Need to Submit a CIS Return?

CIS returns should be submitted by the 19th of each month, including the details of the previous month’s activities. Tax months start on the 6th of one month and end on the 5th, so each return should include all the information between these two dates.

Get Help With Your CIS Returns in Alcester

If you’d like help organising and submitting your CIS returns in Alcester, our team can help. Our accountants can help track your finances, prepare your records, and submit your CIS returns on your behalf. Let us save you time and money, call us today:  01789 507 273