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CIS Accounting & Bookkeeping Services

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At Jems Bookkeeping & Accountancy Services Ltd, we specialise in supporting contractors and subcontractors within the construction industry. Our expert team ensures full compliance with the Construction Industry Scheme (CIS) and helps you stay on top of your tax and accounting responsibilities.

What is the Construction Industry Scheme (CIS)?

The Construction Industry Scheme (CIS) is a tax scheme introduced by HMRC specifically for the construction sector. Under CIS, contractors are required to deduct money from payments made to subcontractors and pass these deductions to HMRC. These payments count as advance contributions toward the subcontractor’s Income Tax and National Insurance.

To operate within the scheme:

 

  • Contractors must register with HMRC.
  • Subcontractors should register to reduce their deduction rate from 30% to 20%.

Understanding Key Roles

Contractor
A contractor is a business or individual who pays subcontractors for construction work. Contractors are legally required to:

  • Register with CIS.Verify their subcontractors with HMRC.
  • Deduct the correct CIS tax rate and submit monthly returns to HMRC.
  • Provide deduction statements to subcontractors.

Subcontractor
A subcontractor is hired by a contractor to carry out construction work. While registration is not mandatory, unregistered subcontractors will face a higher deduction rate (30%). Registered subcontractors benefit from a reduced 20% deduction or, in some cases, 0% if they qualify for gross payment status.

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Value Added Tax
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Work Covered by CIS

Jems has extensive experience supporting businesses across the construction sector. We offer tailored CIS accounting services to ensure compliance and simplify your operations, including:

  • Registration with HMRC as a contractor or subcontractor
  • Accurate CIS tax and National Insurance deductions
  • Day-to-day bookkeeping
  • VAT returns and advice
  • Full PAYE support for construction businesses
  • Monthly CIS returns and submission to HMRC
  • Issuing deduction statements to subcontractors
  • CIS compliance audits and reviews
  • Guidance with gross payment status applications

We offer full-service accountancy packages to ensure your tax, VAT, and specialist compliance needs are expertly managed.

CIS Deduction Rates

The standard CIS deduction rates are:

 

  • 30% for unregistered subcontractors
  • 20% for registered subcontractors
  • 0% for subcontractors with gross payment status
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Business Taxation
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What is Gross Payment Status?

Subcontractors with gross payment status receive their full payment with no CIS deductions. Instead, they are responsible for settling their tax and National Insurance via Self Assessment at year-end.
To qualify, subcontractors must:

  • Be registered with HMRC for CIS
  • Demonstrate a strong record of tax compliance
  • Operate a UK-based business in the construction industry
  • Hold a business bank account
  • Meet HMRC turnover requirements:
  • Sole traders: £30,000+
  • Partnerships: £30,000 per partner or £100,000 total
  • Limited companies: £30,000 per director or £100,000 total
  • Close companies (5 or fewer shareholders): £30,000 per person

Note: Turnover excludes VAT and the cost of materials.

Construction Accountants Across the UK

With offices in London, Watford, Kent, Bristol and surrounding areas, our team supports clients throughout England with tailored construction accounting services. Whether you’re a contractor or subcontractor, we help you navigate the complexities of CIS, from registration and deductions to returns and compliance.

Frequently Asked Questions

What’s the difference between CIS and PAYE?
CIS applies to contractors and subcontractors in the construction industry, with contractors deducting tax at source. PAYE applies to employees across all industries, with employers deducting Income Tax and National Insurance from salaries.
Is CIS different from being self-employed?
Yes. Self-employed individuals manage their taxes through Self-Assessment. If they work in construction, they may fall under CIS as subcontractors—but CIS is a separate scheme with its own rules.
Do all subcontractors need to register for CIS?
No, but unregistered subcontractors will face a 30% deduction rate. Registering reduces this to 20%, making it financially beneficial.
What happens if a contractor fails to pay CIS to HMRC?
Failure to submit deductions can result in significant penalties for contractors, including fines, interest, and potential legal action. Subcontractors may also face delays in receiving credit for tax already deducted, which can affect their own tax filings.

Speak to Our Construction Tax Experts

If you’re working in the construction industry and need professional support with CIS accounting, Jems Bookkeeping & Accountancy Services Ltd is here to help. We offer expert, no-nonsense guidance to keep your business compliant and financially efficient.

Contact us today to learn more or to book your free consultation.

Get in touch with us

+44 (0) 1279 651 277
07788 78 11 31
contactus@jemsaccountancy.com

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