Bookkeeping for
CIS

Contractors &
Subcontractors

If you're a CIS subcontractor then you're used to having tax deducted from you all year via your pay.

The VAT domestic reverse charge for building and construction services, to give it its full title, is a change in how VAT is handled for certain kinds of construction services in the UK, along with the building and construction materials used directly in those services (although it doesn’t apply to building and construction materials supplied separately and independently of any construction services).

The VAT reverse charge for construction is effectively an extension of the Construction Industry Scheme (CIS) and applies only to transactions that are reported under the CIS and are between VAT-registered contractors and sub-contractors.

The scheme means that those supplying construction services to a VAT-registered customer will no longer have to account for the VAT. Instead, the customer will account for the VAT (that is, it will be considered input tax for them, as if they’ve made the supply to themselves).

In even simpler terms, for services they provide, sub-contractors will require the contractor employing them to handle and pay the VAT directly to HMRC.

The payment received will be for the cost of the work done (plus materials used), net of any CIS deductions for tax and National Insurance but no VAT will be paid on the invoice.

What this ACTUALLY means is that most CIS subcontractors may be owed a tax rebate at the end of the tax year once they have submitted their tax returns and claimed for all of their allowable expenses – the important part is knowing what you can and cannot claim for - which is what WE do. 

Forward Analysis Bookkeeping makes sure that CIS subcontractors pay the right amount of tax, get their returns filed promptly after the end of the tax year, and getting any tax owed to them by the HMRC back to your pocket as soon as possible. 

Subcontractors do not HAVE to register but, if they don't, they are deducted at a higher rate than if they were registered (currently at 30%!). 

For full details, visit the HMRC website

Why bother outsourcing your accounts as a subcontractor? 

Anyone can file their tax return themselves, but if you’re not sure how to do this or what you can legitimately be claimed as taxable deductions, we can offer a monthly subscription (or customised packages) that ensures that your accounts are up to date meaning it’s easier get them done at the end of the tax year, and we are available to talk through any queries. 

Received a snotty letter from HMRC? As your agent, we can handle it for you.

When is the best time to buy new equipment? We can let you know. And we can get you the best tax advantage when you DO buy it. 

Making Tax Digital for CIS Subcontractors 

You may have  heard about Making Tax Digital (MTD) which, at the moment, only applies to VAT registered businesses but, very soon, it will apply to any business that has income of over £10,000 a year. This means that you will have to file a return with HMRC four times a year instead of just once.  

You will also have to keep all of your records digitally as part of the change. 

Forward Analysis Bookkeeping are fully Making Tax Digital compliant. Send us your paperwork (we can arrange collection, if you prefer) and we will deal with all of the digitisation and all the relevant submissions to HMRC, allowing you to concentrate on what you do best.  

How our services will benefit you 

You don't need to have an accounting software like Sage, QuickBooks or Xero, or even keep a spreadsheet. All you do is give us your paperwork and we'll handle the rest, making sure that your tax is correct and that you are claiming for all of your allowable expenses. We will ensure that your tax is filed quickly and make sure that any rebate you may be owed is in your bank account as quickly as possible. 

Questions? 

Just give us a call on 020 3239 4979 or contact us via email and we can discuss what’s best for you.

We know that choosing a Bookkeeping Service is an important choice and a big deal. That's why we will strive to keep you more than satisfied – we aim for happy!