As a CIS subcontractor, you need to ensure you are registered as such with HMRC. Contractors you work for will then deduct 20% off the labour element of what you invoice them. If you don’t register they will take 30% from you. This money which has been deducted from you goes against the tax you owe at the end of the year, and you are often entitled to a refund once your tax return has been submitted.
If you are a contractor and are paying subbies, you need to make a monthly submission to HMRC declaring the amount paid and the deductions you need to pay over. This will include verifying subcontractors to find out which rate of tax to deduct from them. There are strict deadlines and HMRC are aggressive with penalties so you need to make sure these deadlines are adhered to. We can help with this. Just send us the details of the subcontractors you have paid each month and we will do the rest.