If your company or organization has the primary service of construction in the United Kingdom, then you may have crossed with the term CIS (Construction Industry Scheme) Payroll, and the chances are that your company would have listed under the scheme as well. The CIS Payroll is a scheme in which contractors have to deduct payments given to the subcontractors and need to deposit the deductions to the HM Revenues and Customs Department for tax and National Insurance.
Aim of the scheme is to get the money that the HMRC departments and government deserve. A subcontractor may deposit a false amount of tax by showing low income, so it is directly deducted by the contractor and deposited to the government. This is important as the governments should get the amount of taxes they deserve to make a better future.
For which Organization
Apart from the contracting services, there are other company’s or organization which should register under the scheme. An organization that has been involved in construction for 3 years and has to spend 1 million Euros should register themselves under the CIS Payroll company scheme. For example: – there is a banking company, and they are making their branch in the UK, and the construction process has crossed three years, then they need to register themselves under the scheme.
It does not matter if your company operates from outside; if the construction is going on in the lands of the United Kingdom for more than three years and you have spent more than 3 million Euros (1 million annually), then you need to register under the service. So if your company is planning on having construction in the UK then you should keep in mind the CIS Payroll scheme controlled by the HMRC department.
Now that we know what criteria are to register under the CIS Payroll scheme. Let’s discuss the steps you should follow to register under the scheme.
- Have the UTR: – Your primary step would be to register under the HM Revenue and Custom’s Department; for this you should submit the self-assessment form. The details you fill in that form should be apt and right. After this you will get a UTR number; UTR stands for Unique Taxpayer Reference Number.
- Contact the CIS Officer: – As you get the UTR, you are now able to deposit taxes. Your next step would be to be enlisted under the CIS Payroll scheme. By enrolling under the scheme, you would be able to make deposits to the department. For this, you have to contact the CIS officer and tell them to enlist your firm in the scheme.
- The Paperwork: – When you are registering under the scheme, it could be difficult and frustrating for this you can hire people to do that. As you are registering after that deduction and deposit can be a significant headache and may not let you focus on your work, but when you hire an agency it would completely dedicate itself to do this job. So hire an agency for easy deductions and deposit. There is an option to do it all by yourself, but we advise you to have an agency.
- Last Steps: – As you hire an agency, the agency will carry out the headache of depositing and deducting the payments. There are a number of activities which you would be carrying if you do not hire an agency. In simpler words, when you hire an agency, you need not worry about any activity.
Now that we know what are the steps of submitting the deductions. Let’s discuss what factors you should look out for when you are hiring the agency: –
- Experience of the agency: – There is a number of agencies in the market you need to be sure that you are choosing the agency which has the experience of doing the work. As experience tells us, if the agency is able to do the work.
- Price: – As we said that they are a number of services you should choose a service which is comfortable to your pocket. Price does not tell us if the agency is good enough to do your task.
Conclusive Words
If your company’s primary source of income is the contractor services, then you should be in the CIS Payroll services. This scheme is to ensure that if subcontractors are submitting enough taxes and advancements. Under this scheme, the contractor has to deduct the payments which are supposed to be given to the subcontractors; these deductions are deposited to the department. When you are registering for the services, you should be aware that there is a lot of work involved. To do this, a hard work agency can be hired. We have explained some of the steps which you can do to be registered under the scheme.