CIS Services for Contractors and Subcontractors
Under the Construction Industry Scheme, contractors deduct money from payments to subcontractors and pass it to HMRC as advance payments towards the subcontractor's tax and National Insurance. Sterling Crest Accountants supports contractors with verification, deductions and monthly returns, and supports subcontractors with reconciling and reclaiming the deductions taken from their payments.
Sterling Crest Accountants provides this service to clients throughout the United Kingdom. Consultations are arranged in advance by telephone or online meeting. Our registered office is in Leeds, West Yorkshire.
About the Construction Industry Scheme
Contractors must verify subcontractors with HMRC, deduct tax at the correct rate unless gross payment status applies, and file monthly CIS300 returns. We maintain subcontractor records and prepare returns from payment data you approve.
Subcontractors need statements of deductions and use suffered amounts as credits on self assessment or corporation tax. We reconcile CIS statements to your accounts and highlight missing certificates.
Gross payment status applications and renewals involve HMRC tests. We provide guidance on documentation HMRC expects but approval remains HMRC’s decision.
CIS interacts with payroll when you employ staff as well as subcontractors. We coordinate figures with payroll and bookkeeping where we provide those services.
Who this service is for
- Construction contractors paying subcontractors
- Subcontractors receiving CIS deductions
- Businesses outside construction whose construction spending makes them deemed contractors
- Trades operating through limited companies in CIS
- Partnerships and sole traders in construction supply chains
- Businesses needing CIS aligned bookkeeping
Common challenges
- Wrong deduction rate because verification lapsed
- CIS300 filed late after busy site weeks
- Subcontractors missing monthly statements
- Deductions suffered not matched to HMRC records
- Materials versus labour split errors on payments
- Gross status expiry not tracked
What is included
- Subcontractor verification checks before first payment
- Monthly CIS300 preparation and submission after approval
- CIS payment and deduction schedules for your records
- Subcontractor statements issued when acting for contractors
- Reconciliation of CIS suffered to statements for subcontractors
- Support claiming CIS credits on tax returns where we act on tax
- Notes on gross payment status evidence requirements
- Coordination with payroll for employed labour
- Listing of unverified subcontractors blocking payment
- Routine HMRC CIS correspondence within scope
How the service works
- 1.Confirm whether you act as contractor, subcontractor or both
- 2.Set up subcontractor records and verification status
- 3.Receive payment lists split labour and materials
- 4.Prepare monthly return and statements for review
- 5.Submit CIS300 and issue statements after approval
- 6.Reconcile suffered deductions into tax work at year end
Documents normally required
- UTR and Companies House details for subcontractors
- Verification references from HMRC checks
- Payment summaries split between materials and labour
- Invoices from subcontractors
- CIS statements received if you are subcontractor
- Prior CIS300 submissions and HMRC notices
- Gross payment status approval letters if held
UK compliance information
- Employment status of workers is not determined by us as part of CIS filing.
- We do not guarantee gross payment status approval.
- Penalties for late CIS300 follow HMRC rules.
- Complex disputes with HMRC on construction status need separate scope.
Key deadlines
Monthly CIS returns must reach HMRC by the 19th of the month following the tax month. For example, the return for the tax month 6 May to 5 June is due by 19 June. A return is still required in months with no payments unless HMRC has been told you have temporarily stopped using subcontractors.
Confirm official dates and rules on GOV.UK. Rules and thresholds can change.
What this work helps you maintain
- Verification completed before payments at wrong rates
- Monthly returns prepared from approved payment data
- Subcontractor statements tied to submitted CIS300
- Suffered deductions reconciled into tax computations we prepare
- Nil returns or inactivity requests handled in months without payments
Related services
- BookkeepingStructured bookkeeping for sales, purchases, bank transactions and business records, helping maintain accurate financial information for VAT, payroll, accounts and tax reporting.
- PayrollPAYE payroll processing for UK employers, including RTI submissions to HMRC, payslips, statutory payments, pension deductions and year end forms.
- Self AssessmentSelf Assessment Tax Returns for individuals, sole traders, company directors and other taxpayers, prepared from the relevant income, expenses and supporting tax information.
- Corporation TaxCorporation Tax Return preparation for UK limited companies, including the relevant tax computation and CT600 submission to HMRC based on the company's accounts and tax records.
Frequently asked questions
Contractors who pay subcontractors for construction work must register. Businesses outside construction may also count as contractors if their spending on construction exceeds HMRC's limits. Subcontractors do not have to register, but unregistered subcontractors have deductions taken at a higher rate.
A return telling HMRC about payments made to subcontractors in the tax month and the deductions taken. It must reach HMRC by the 19th of the month following the tax month, and includes a declaration that the subcontractors listed are not employees.
Details of each subcontractor and their verification, the gross amount of each payment, the cost of any materials, the deductions made, and copies of the payment and deduction statements given to subcontractors.
Yes, scope depends on your role. Some clients need both contractor returns and subcontractor credit work.
We advise on evidence and application steps. HMRC decides eligibility against turnover and compliance tests.
Bookkeeping can record CIS entries, but CIS300 submission is a separate agreed service.
We re verify and adjust future payments. Prior month corrections may need amended returns within HMRC limits.
HMRC charges a penalty that starts at £100 for a return one day late and increases the longer it remains outstanding. Filing nil returns, or telling HMRC you have stopped using subcontractors, avoids penalties in months with no payments.
A limited company subcontractor can usually offset CIS deductions against its PAYE liabilities through its Employer Payment Summary, with any balance reclaimed from HMRC. Sole trader subcontractors normally claim credit through their Self Assessment tax return.
Discuss the Construction Industry Scheme with Sterling Crest
Book a free consultation or send an enquiry. Scope and fees are confirmed in writing before any engagement begins.
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