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Construction Industry Scheme (CIS)

What Fyling does and does not do

Fyling keeps a company's subcontractors, asks HMRC to verify them, records what was paid each month, and prepares the monthly return for you to check.

Your practice sends the return under the company's own Government Gateway login. Fyling does not decide which rate applies to a subcontractor: HMRC tells you when you verify.

What CIS is

Under the Construction Industry Scheme, a contractor deducts money from payments to subcontractors and passes it to HMRC. The rate is 20% for a verified subcontractor, 30% if not verified, or nothing if the subcontractor has gross payment status. The contractor reports each month on a CIS300 return.

Source: gov.uk: What you must do as a CIS contractor

Set up a company

Open CIS and choose the company. Under Setup, enter the HMRC references the returns are sent under.

Verify a subcontractor

You must verify a subcontractor with HMRC before you first pay them. HMRC replies with the rate to deduct and a verification number.

  1. Under Subcontractors, add the person or company.
  2. Choose Verify and send the details HMRC asks for.
  3. Read HMRC's answer. The verification history on the page keeps each one.

Source: gov.uk: Verify subcontractors

The monthly return

A CIS tax month runs from the 6th to the 5th. The return is due by the 19th after the month ends. The Returns page lists each month, soonest due first.

  1. Open the month and enter each payment: gross amount, materials and the deduction.
  2. Prepare the return. A return cannot be sent with a subcontractor who has not been verified.
  3. Check the working and mark it ready.
  4. Send it. The page shows what HMRC answered.

If you paid no subcontractors in a month, the return is prepared as a nil return, which you confirm before sending.

Source: gov.uk: File your monthly return

Statements for subcontractors

You must also give each subcontractor a payment and deduction statement within 14 days of the end of the tax month.