CIS (Construction Industry Scheme) applies to both contractors and subcontractors that work in the construction industry. This scheme regulates the way in which the contractors from the construction sector make payments to subcontractors for the provided services.
If you are registered as a subcontractor in the CIS, the contractor will deduct 20% from the value of the issued invoices and this sum will be used to cover all the taxes corresponding to the financial year. If you are not registered as a subcontractor, the deduction will be 30% of the same declared value. In both situations you can recover a part of the prepaid taxes, but only after you fill in the self assessment tax return form at the end of the year. All this details make up a highly complex process, therefore we strongly recommend you to seek expert assistance.
CIS covers all the activities related to construction field developed in the UK and includes the preparation of the working site, changes, decommissioning, repairs, decorations, demolitions, etc.
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