fbpx

CIS Specialised Accountant Near Me | In Leeds

By Sarah Lockwood

Do you work within the Construction Industry? If so, Northern Accountants can help your business as we’re accountants who are specialised in CIS related tax and business support, based in Leeds, West Yorkshire.

CIS logo for the article CIS Specialised Accountant Near Me In Leeds

For starters, what information do you need to know?

As a subcontractor, being CIS registered can increase cashflow and benefit you in many other ways, as the tax is deducted at source. Meaning, it is already paid on your behalf by the contractor.

The deductions are seen as advance payments towards the subcontractor’s tax and National Insurance that will be owed at the end of the tax year.

This avoids a one-off balloon payment being due at the end of each year. It also means that you only have the remaining balance to settle, if any.

If you are a contractor, you must be registered under CIS. You are seen as a contractor if you pay subcontractors for labour that relates to construction work.

Here at Northern Accountants, we have a specialist team who are CIS accounting experts. If you need help with your accounts or business support, contact our office or continue reading to learn more.

Northern Accountants

Table of contents:

What Is CIS?

CIS stands for Construction Industry Scheme. Under the scheme, there are contractors and subcontractors.

Contractors deduct a portion of the money from a subcontractor payment to then pay to HMRC. This can be deducted at 0%, 20%, and 30% depending on the sub-contractor.

The way to find out how much CIS tax you need to deduct from each subcontractor, is by verifying them through the HMRC website or your preferred accounting software.

To be able to verify a subcontractor, the minimum information required is their trading name & their UTR in which they verified themselves with HMRC.

  • 0% deduction means the subcontractor is registered as Gross Status, where contractors aren’t allowed to deduct CIS tax from them.
  • 20% deduction means the subcontractor is registered at the standard deduction rate per HMRC.
  • 30% deductions mean the subcontractor has not yet verified themselves with HMRC, and so they aren’t recognised and are seen as an unknown subcontractor within the Construction Industry Scheme.

CIS deductible means you are a contractor and must pay the tax element that you have deducted for the payment to the sub-contractor.

CIS Suffered means you are the sub-contractor and you have received a payment net of any deductions.

When, And How Often To Submit Your CIS?

CIS submissions are to be sent to HMRC monthly.

CIS returns for CIS stopped and EPS submissions for CIS suffered are due to HMRC by the 19th of every month.
The period you are reporting for will be the 6th of the month to the 5th of the next month.

For example, if you are reporting CIS figures for the period 6th of April to the 5th of May, this will be due to be submitted and any payment will be due by the 19th of May.

Does Your CIS Affect Your PAYE Due?

Your CIS doesn’t directly affect your PAYE. However, it does affect how much you pay.

If you stop CIS from your subcontractors, this amount is due to be paid back to HMRC every month, so this can be added to your PAYE figure that is already due.

Also, if you suffer CIS, the amount suffered for the month can be deducted from your original PAYE amount due for the related month.

Lastly, if you are a contractor and a subcontractor, which means you stop and suffer CIS, then you can add your stopped figure to your PAYE figure, and then deduct how much CIS that you have suffered for the period and this is the amount that will be due.

Sometimes, if you suffer more than the total of your CIS stopped plus your PAYE, then you will be in credit for the related period and then will have nothing due to pay. More info in regards to paying CIS or PAYE can be found with HMRC: www.gov.uk/pay-paye-tax

Do You Have To Be Registered For CIS?

The simple answer is if you are a contractor then yes you do have to be registered under the CIS scheme but if you are a subcontractor then you do not. However, this is when you will have 30% deductible from the payment you are owed.

You also do not have to be registered under the CIS scheme if you are not related to the construction industry.

More info about this can be found on the gov website: www.gov.uk/what-is-the-construction-industry-scheme

What Next?

I hope that this article has helped you to understand the steps you need to take to become CIS registered, and all the steps in between. Whether it be as a contractor or subcontractor.

If you need any further help on how to register for CIS, or you’re looking for a CIS accountant who knows your industry inside out, please contact us at Northern Accountants as we’ll be happy to help.

5 Benefits Of Using Xero For CIS!

By Sarah Lockwood

There are many accounting software currently on the market that can be useful for producing and submitting CIS information and returns.

One that we recommend the most at Northern Accountants is Xero.

Why?

Because we belive it’s the most comprehensive accounting software that makes submitting CIS information, tracking payments, filing invoices and tax returns to the HMRC a breeze.

Table of contents:

Easy And Efficient To Use!

One of the main benefits of using Xero to prepare and submit CIS information to HMRC is that it is simple and straight forward. It can also be completed alongside your day-to-day bookkeeping.

CIS transactions can be easily reconciled in the bank. They will also be sent to the correct nominal codes, which will later calculate the figures needed to be sent to HMRC for every period.

Xero also gives you the clear visibility needed of previous and upcoming submissions. This ensures that you keep on top of your tax affairs.

Subcontractor Verification

Another benefit is that you can verify your subcontractors through Xero, rather than the HMRC website.

The information needed to do this is the trading name and UTR number. All information required is clearly set out on the Xero contact template if CIS registered.

Using Xero to verify subcontractors means that you instantly know how much CIS tax is to be deducted from the source when making payments.

Xero advises whether your subcontractors are registered for CIS or not. You can also check this using the HMRC website by logging in with the following link: www.gov.co.uk/paye-online/

Automatic CIS Tax Calculation

Calculator and paper showing the Xero allows for Automatic CIS Tax Calculation

Once you have verified your subcontractor through Xero, it will then be easier to calculate the CIS tax that needs to be deducted from your subcontractor.

For example;

Your subcontractor will need either 30%, 20% or 0% deducted. This depends on what it comes back at once you have verified them.

  • 30% means that they have not yet registered or verified themselves under the CIS scheme.
  • 20% means that they have verified themselves and are standard rated.
  • 0% on the other hand, means that subcontractor has registered as Gross Status. This means no tax should be deducted at source. Leaving the gross amount of the invoice to be paid directly to them.

The CIS deduction is automatically calculated when you create an invoice for the subcontractor.

The nominal you need to use in Xero to ensure the CIS tax is taken off is ‘CIS Labour Expense’. This will then calculate the final amount. The final total of the bill is the amount that you need to pay your subcontractor.

CIS Return Submission Through Xero

If all of your subcontractors are verified through Xero, then you are able to submit your CIS return through Xero.

The CIS deducted, which is calculated on each subcontractor invoice is added together. This then leaves a figure that needs to be submitted to HMRC.

As your CIS deductions are automatically worked out by Xero, Xero also calculates the amount that needs to be reported to HRMC every period.

All you need to be able to submit your CIS return through Xero are your HMRC logins.

For more information on using Xero to manage your CIS, contact our offices for help. Alternatively, use the following link to read more on Xero’s website About Construction Industry Scheme (CIS) in Xero

Electronic Downloads Of CIS Statements

A final benefit of using Xero for CIS is that you can download your subcontractor’s deduction statements electronically. This feature can be found in the reporting tab and is simple and easy to do.

They can be downloaded as PDF documents, meaning these can be sent out to your subcontractors for them to easily view.

Xero can ensure that you have accessibility to previous and current records in relation to CIS. If for any reason copies are requested directly from the subcontractor or HMRC.

What Next?

In conclusion, I hope you found this article useful, and that you took away everything you needed to known about using Xero for CIS.

If you get stuck when using Xero in order to prepare CIS information for yourself, your subcontractors, or most importantly, HMRC – please feel free to get in-touch.

If you need more information on either the Construction Industry Scheme, using Xero or any of your tax or business related questions – contact us at Northern Accountants, we’re always happy to help.

Northern Accountants (Leeds), Olympus House, 2 Howley Park Business Village, Pullan Way, Leeds, LS27 0BZ