Construction Industry Scheme(CIS) and form
CIS301
If your business is in the construction industry on a self-employed basis, you must know the
Construction Industry Scheme (CIS). HMRC introduced this scheme to ensure tax compliance.
To register with the CIS scheme, the key form that contractors must submit to the HM Revenue and
Customs (HMRC) is CIS301. This is a tax withholding scheme in the construction industry. You may
have to register this in order to report subcontractor payment details to the HMRC.
How is the registration, and what is the CIS301
This is the form that contractors may complete and submit for the Construction Industry Scheme
(CIS). This form requires contractors to submit the details such as name, address, and Unique
Taxpayer Reference (UTR). Further, it is required to provide the business address so HMRC can
contact you. The contractors must provide a document to prove their identity and address. HMRC
will evaluate your application and let you know whether you are eligible for registration. You can
submit it online or post it. If you want to process it fast, online submission is the best.
If HMRC is satisfied with your application, you will receive a Unique Taxpayer Reference (UTR). It is a
contractor identification number for tax purposes. It consists of 10 digits’ code and must be used for
all contractor documentation, payments, and monthly return submissions.
You must register for the Construction Industry Scheme (CIS) if you're a contractor. If not, HMRC will
set penalties and fines. Subcontractors may not be required to register, but deductions taken from
them are higher if they have not registered. On the other hand, CIS is a tool that confirms your
eligibility to operate in this construction industry. And this scheme is a link between you and the
HMRC. They have the necessary information to contact you in the case of an audit or investigation.
Payments to subcontractors
When you're submitting the payment details, it needs to mention the subcontractor payments
excluding the VAT amount. And also the CIS deductions made. Under the scheme, you must be made
the deductions irrespective of the CIS registration. The contractor paid subcontractors by deducting
20% and sent it to the HMRC.
After you complete the return, you must make the submission. You can submit it either by mail or
electronically to HMRC. For electronically, first, register to create the HMRC portal and follow the
guide.
Why do you need professional help?
CIS returns need to be complete accurately. It must include all the subcontractor details, payments,
and CIS deductions. If there is a mistake, it causes to late process and may apply some penalties.
They know the latest update and amendments and have the relevant practical experience to
coordinate with the HMRC.
This process may be time-consuming if you are not familiar with the process or you have many
subcontractors. If you take professional assistants, they ensure the work's accuracy and
completeness and submit it on time. Also, they will answer if there any query arises. You can
concentrate only on your day-to-day business arrangements.