These returns are reports that are required to be submitted to HMRC each month under the Construction Industry Scheme.
If you are in the construction industry, the subcontractors you pay must be verified to determine their tax status. This may require you to make a deduction which you would then pay to HMRC. The deduction is only calculated on labour cost and does not include the cost of materials incurred by your subcontractor.
Types of work that are covered by the scheme
The scheme covers all construction work carried out in the UK, including jobs such as:
The scheme does not apply to construction work carried on outside the UK. However, if your business is based outside the UK and you are carrying out construction work within the UK, you will be within the scheme and must register accordingly.
Registering for the scheme
All contractors must register with HMRC for the CIS. Subcontractors who do not wish to have deductions made from their payments at the higher rate of deduction (30%) should also register with HMRC.
If you are a contractor, you must send HMRC a complete return of all the payments you have made within the scheme or file a NIL return if you have made no payments. The return will include:
Each month, or quarter in some cases, you must send HMRC a payment for the deductions you’ve made from subcontractors.
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