Sibley Bros LLP
Construction Industry Accounts Software
Sibley Bros LLP
Accounting under CIS (Construction Industry Scheme)
As a contractor you have certain obligations under the CIS scheme, including registering with the scheme, checking whether your subcontractors are registered with HMRC, paying subcontractors and submitting monthly returns.
Our Construction Industry Accounts CIS software received official HMRC approval for the CIS Scheme and deals with all aspects of the subcontractors accounts including:
- online subcontractor verification
- subcontractor tax deduction calculations
- HMRC Monthly returns
- monthly subcontractor statements
CIA is a fully integrated Construction Industry Accounting software solution designed exclusively for Construction Industry.
Construction Industry Scheme Accounting Guidelines
The Construction Industry Scheme (CIS) is a set of special rules introduced by HMRC for handling payments that contractors make to subcontractors for construction work.
The scheme covers all types of Construction Industry work carried out in the UK, as well as some other closely related work. If your business is involved with construction operations then it might operate as a contractor or as a subcontractor - or as both. The terms construction operations, contractor and subcontractor have special meanings under CIS scheme as defined below.
Contractors under CIS.
Under the rules of CIS, you're a contractor if:
- you run a business that engages subcontractors for construction operations - a 'mainstream' contractor
- you run a business that spends an average of £1 million or more a year over a three year period on construction operations - a 'deemed' contractor
Any type of business, including a company, partnership or self-employed individual, can be a CIS contractor. If you are contracted to work in domestic households and you engage subcontractors you are a CIS contractor and will have to operate CIS. However, if you’re a private householder you’re not a contractor regardless of your spending.
Any type of construction work done to a permanent or temporary building or structure - or to a civil engineering work or installation - is covered by CIS Scheme.
Subcontractors under CIS.
You're a subcontractor under CIS scheme if you agree to do any type of construction work for a contractor. It doesn't matter how you actually carry out the work - you could do it yourself, get your employees to do it, use your own subcontractors or make some other arrangement.
Subcontractors can be businesses, self-employed individuals, or other bodies and organisations. Some examples of construction industry subcontractors include:
- sole traders, partnerships and companies that do construction work for contractors
- labour agencies and staff bureaux that use their own workers to do construction work for a contractor - or that supply (but not just introduce) workers to a contractor
- gang leaders who contract to do work for a contractor and are paid for the work done by their gang
- foreign businesses paid to do construction work in the UK, or in UK territorial waters
- local authorities and public bodies that do construction work for someone else
You may well be a contractor and a subcontractor at the same time. It's quite common for businesses in the construction industry to do construction work for a contractor, and pay their own subcontractors to do work for them. When you're being paid by a contractor to do construction work you're a subcontractor and you must follow the CIS rules for subcontractors. When you're paying your own subcontractors you're a contractor and you must follow the CIS rules for contractors.
Construction operations under CIS scheme.
CIS scheme covers construction operations carried out in the UK. The rules of the scheme define the types of work that are classed as construction operations. As a general rule, the scheme includes almost any type work that's done to a:
- permanent building
- temporary structure
- civil engineering work or installation
Some examples of the construction work that are covered by the CIS scheme include jobs like:
- site preparation
- general construction - bricklaying, roofing, plastering and so on
- alterations and extensions
- repairs and refurbishment
- dismantling work
CIS also uses specific definitions of terms like alteration, repair and extension. You can find more information at HMRC web site .