CIS stands for Construction Industry Scheme. Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).
Contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at a higher rate if they’re not registered.
Did you know that you can register for Gross status if your CIS turnover is above a certain amount?
- Gross Status is for companies that have been trading within the CIS scheme for a while and are trusted by HMRC to pay their tax without the deductions being made. When registering for gross status, there is a turnover test you will need to pass for your application to be successful.
- The turnover test – HMRC will look at the following
Once you pass the above criteria, HMRC will look at your turnover for the last 12 months. Ignoring VAT and the cost of materials, your turnover must be at least:
- £30,000 if you’re a sole trader
- £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
- £30,000 for each director of a company, or at least £100,000 for the whole company
If your company does not pass the above criteria, please note that you will not be able to register as HMRC will reject the application and you will continue to be paid under deduction.
If you think your company is close to meeting the criteria, Please feel free to get in touch with #TeamSAS and we will be able to keep an eye on your CIS turnover, so when you do go over the threshold, we will be able to assist!
