The 5th of the month has only just passed and already your accountant has sent an email requesting your CIS information.
We understand that this is the last email you want to see in your inbox when you are preparing to visit a site to prepare a quote, however, the importance of submitting the correct information before the 19th of the months deadline is imperative to your business.
At SAS, we have listed some below some top tips to make what can be a pain in the butt of a task, more simple and an easier process.
- That new subcontractor has joined and you already have a number of tasks lined up before the first tea break, make the first task getting their UTR and NI number from them. Ask them if they have already registered for CIS with HMRC, if not get them to call HMRC on 0300 200 3210 to register themselves as a CIS worker on HMRC’s system. This will benefit you as the contractor by having the vital information for your accountant to verify the subcontractor ready for the next submission. Ask us to send over a simple new starter information form for your new subbies to complete.
- Linking your business bank account with your accountants accountancy software will keep them up to date with all transactions and will already have them ahead of the CIS submission by seeing payments to your subcontractors. If any of these payments do not relate to CIS deductions, make your accountant aware, I can confirm the more information we have regarding the monthly submission is always helpful. This could be the difference with you as a business paying CIS on what was actually a cost of materials payment and should not of been included in the submission. Let’s face it, who wants to give HMRC money they legally do not need to be given.
- The sooner we have the CIS information, the sooner we will have this prepared and sent to you for approval. This will allow time for any amendments to be made and ready to be submitted ahead of the deadline of the 19th of the month. Any submission after this date is classed as late and an automated £100 penalty will be applied to your account.
- Payment, if one is needed, should reach HMRC’s account by the 22nd of the month, this can take a few days to process so let’s make sure once the submission has been confirmed on or before the 19th, that payment is made to HMRC to avoid any delays. The sooner this submission and payment is made, the sooner we can be sliding out of your inbox…until the 5th of the following month that is.
- If you are a sub-contractor business and are receiving payment net of CIS deduction, you may qualify for Gross status. This means that the contractor will not deduct any CIS tax from the payment you receive. Obtaining gross status can improve cash flow, helping you to cover wages, materials and other costs. This status also improves your businesses reputation, a gross payment status means HMRC trust you to pay your own monthly tax payments on time, your contractor will also view you as a trusted and secure subcontractor. However, this does mean the little pot of CIS deductions sitting as a credit on your HMRC account will stop, meaning there may be a tax bill to pay to HMRC at the end of the year…maybe put this aside each month so it doesn’t feel too painful when that tax bill arrives.
We appreciate that your CIS submission can feel like a burden and do not want to add to your workload with a number of questions and queries, but having the information sooner and all subcontractors details on account and verified will make the submission much more simple for all involved. Plus, it’ll make both yourself and your subcontractors much more satisfied at the end of the tax year when the deduction statements are requested and can be sent out without delay.
Have a question? Get in touch with a member of #TeamSAS today
