The CIS payroll scheme is made by the HM Revenue and Custom Department, and every person involving in the large scale construction should be registered within the department and enlist themselves under the scheme. CIS stands for the Construction industry Payroll; every contractor needs to register with the scheme.
This scheme is for people who are having construction in the country of the United Kingdom. Contractor under this scheme needs to deduct the payment they are giving to subcontracts to the Revenue and Customs departments as the advance payment for the national insurance.
The aim of the CIS payroll is to have advance payments of subcontractors for their insurance and taxes. This is paid by the subcontractor at the end if you are not registered under the scheme, but with this scheme, the government gets the tax and installment they deserve. As a subcontractor can show the income less than what they really earned. CIS Payroll is for every organization which takes the contractor services as their primary business.
If your company is involved in the construction activities for three years and spending 1 million Euros every year, then your company should be registered with the department and should enlist themselves under the scheme. It does not matter if your business is based in the UK or not, but if it’s fulfilling, but if it is constructing something in the UK then it should follow the CIS Payroll scheme.
How can you register with the CIS Payroll Schemes?
If you are organizations lie in any of the above criteria, then you should have registered in the department and enlist for the CIS Payroll scheme. Let’s discuss the steps involved in registering in the scheme: –
- Have the UTR Number: – The first step to enroll in the CIS Payroll scheme is that you should get a UTR (Unique Taxpayer Reference) number from the HM Revenue and Custom Departments. A self-assessment form should be filled by you; this form is offered by the department.
- Get Enlisted: – As you get a UTR number from the department, you should contact the CIS officer to get under the CIS payroll scheme. By doing this, you can deposit the deductions from the subcontractors to the department.
- Fill the forms: – After you contact the officer to enlist under the scheme, you will be provided with the forms and tests. There are many services that can take the headache of carrying out the administration process.
You need to choose a service that is trustworthy and has a good track because they have access to important information. There is a lot of paperwork involved in this; this is the main reason why people hire services. You can do all this administration work all by yourself.
- Last Steps: – As you fill out the forms or hire a service for this, then you will be listed under the scheme. As you enlist in the scheme, you can send the deductions to the department as the advance payments and tax.
As we said that you could do that all the administration work all by yourself. Let’s discuss what the benefits of hiring an agency instead of doing the work all by yourself: –
- Focus on the Business: – You need not be involved in the paperwork of submitting the forms and deducting the payments of subcontracts. If you do, you will not be able to focus on the business and your work. So always hire an agency for the CIS Payroll.
- Reduced Administration: – When you hire a service for all this work, the administration work minimizes as the majority of the work is handled by the agency. The agency work involves invoicing, payment, and issuing the statements. This minimizes the stress on the contractor and allows them to do work comfortably.
- Expense of the Business: – As you hire service, then your business expense will be minimized as these services allow you to pay the tax yearly and not monthly. When you deposit the tax yearly, you save a lot. This is possible because the agency takes the headache of all the paper and administration activities.
- Statements: – When you hire a service it takes responsibility for all the paperwork and administration duties. By this, you can have the statements for every payment your organization you made. If you do that by yourself, this can become a significant headache.
CIS Payroll is a scheme in which contractors have to deduct the payments of subcontractors and submit to the HM Revenue and Customs Department. Every organization which is involved in large scale construction should be enlisted in the scheme. We have depicted some steps you should follow to enroll yourselves in the CIS Payroll Scheme.