To be paid correctly by a contractor, make sure you give them the same legal business name or trading name you gave when you registered for the Construction Industry Scheme (CIS). Please speak to your accountant or adviser if your not sure which name to use.
If you don’t, this could affect how much you get paid.
When a contractor pays you under CIS, they’ll normally make deductions at the standard rate of 20%.
Contractors will make deductions at a higher rate of 30% if:
- you aren’t registered for CIS Scheme.
- they can’t verify you
- you give the wrong name for your business
- You give a wrong UTR
- You give a wrong NI Number
Your contractor should give you monthly statements of payments and deductions. Use them to calculate whether you still owe National Insurance and Tax to HM Revenue and Customs (HMRC) or are due a refund.
Gross payment status (This is were no deduction is made!)
You can apply for gross payment status when you register for CIS. This means the contractor won’t make deductions from your payments and you’ll pay all your tax and National Insurance at the end of the tax year.
What doesn’t count as your pay
- plant hired for the job
- manufacturing or prefabricating materials
Limited Company Registration and all the initial Setup.
- Please Let us help you today register your limited company and ensure the legal structure is Tax Efficient!
- We shall also help with opening a business Bank Account, Payroll, Staff & Sub Contractor Contracts, Bookkeeping, VAT and End of year Accounts.
- And that is just the start!