CIS: What’s changing and how does it affect you?

What is CIS?

The Construction Industry Scheme (CIS) defines how much contractors in the construction industry pay their subcontractors and what they give to HMRC as tax. As a contractor you must ensure you register with the scheme and stay compliant with it by ensuring your subcontractors are registered with HMRC, you submit monthly returns and pay subcontractors correctly.

What is changing to CIS?

The HMRC continue to modernise and develop their technology as they no longer take phone calls and everything is done online. So from April 2016 CIS returns and amendments could only be made online. However the main changes made from April 2017 is to do with CIS verification being done online. This means that you can either do it through the HMRC website or an easier option would be to use construction accounting software that is compliant with CIS.

Who is affected?

Contractors must register for the scheme and subcontractors have the option, although they are better off by registering as it will lower the amount of tax they pay. HMRC considers you to be a contractor if:

• You pay subcontractors to do your work.

• You’re a business that spends an average of £1 million on construction a year over a three year period.

On the other hand you are considered a subcontractor by HMRC if you do construction work on behalf of other people/businesses.

What to do?

Both Construct for Sage and EVision construction accounting software developed by Eque2 are compliant with CIS and are verified by HMRC. This means that you can keep all your data within one place rather than switching between spreadsheets, your web browser and your accounting software. Our software will ensure your contractors or subcontractors are verified by HMRC and help to prevent any potential errors. Therefore saving time and your reputation. Contact MSA to learn more.

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