What is CIS Payroll?

CIS refers to Construction Industry Scheme Payroll. This is a term used in the construction industry when referring to contractors who pay subcontractors to perform work for them.

CIS Payroll sets the rules which contractors must follow regarding how they pay their subcontractors for this work.

This scheme was developed by HMRC and it only applies to the United Kingdom’s construction industry. Other countries and territories have their own rules for construction and payments to subcontractors.

The Construction Industry Scheme sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.

Who is Eligible?

Traditionally, CIS Payroll applies to companies that supply construction services as their primary business model, such as contracting companies. But it is possible for companies that are not in the construction business to still need to adhere to the CIS payroll requirements.

The general rule is that if any company spends over £1 million annually on construction, within three consecutive years, then they must register under the scheme.

Who else may it apply to?

  • Housing Associations

  • Local Authorities

  • Labour Agencies

  • Other Government Agencies

What are your responsibilities as an Agency?

A company that heavily involves themselves in the construction business must register themselves with HMRC. During the registration process, the company needs to specify if they are registering as a contractor or a subcontractor

They also need to specify if they are just a Self-Employed person, Limited Liability Partnership, Company or Partnership.

The benefits of using Ezy

  • Verify each sub-contractor with HMRC

  • Calculate and pay CIS tax

  • Inform the sub-contractor the amount they will be paid

  • Take all responsibility for all status submissions to the revenue

  • Provide both a payment statement (for each time the subcontractor is paid) and an annual CIS deduction statement

  • Avoid the risk of CIS penalties

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