CIS Contractor Registration in Kent

When you need to register as a contractor

The Construction Industry Scheme (CIS) puts the responsibility for collecting tax from subcontractors on the businesses that pay them. If you pay subcontractors to carry out construction work, HMRC expects you to register for CIS before you take on your first subcontractor. That includes builders, developers, roofing and groundwork firms, and labour-only gangmasters who pass work down the chain.

Some businesses become contractors without doing any building work themselves. If your business does not do construction work but has spent more than £3 million on construction in the 12 months since its first such payment, it is treated as a contractor too. Property investors, retailers and housing providers with large refurbishment programmes sometimes miss this. HMRC sets out the rules in its guidance for CIS contractors.

What registration sets in motion

Registering is the easy part. Once you are a contractor, you take on a set of ongoing obligations:

• Verifying subcontractors. Before paying a new subcontractor you must check with HMRC whether they are registered and what rate to deduct. You also need to re-verify anyone you have not included on a CIS return in the current or last two tax years.
• Making the right deductions. Registered subcontractors normally suffer a 20% deduction, unregistered ones 30%, and those with gross payment status none at all. Deductions apply to labour, not to VAT or materials the subcontractor paid for directly.
• Monthly reporting. You file a return every tax month and pay the deductions over to HMRC alongside any PAYE.
• Statements and records. Subcontractors are entitled to a payment and deduction statement, and you must keep full CIS records.

Getting the verification details wrong is a common source of trouble. The name, UTR and other details you give HMRC must exactly match what the subcontractor used when they registered, otherwise you may be told to deduct at the higher rate.

How we get you set up

1. We confirm whether your business is a contractor, a subcontractor or both, as many Kent building firms are.
2. We register the business for CIS, usually through your PAYE scheme, and set one up if you do not already have one.
3. We collect your subcontractors' details and run the verifications, recording each verification reference.
4. We set up your bookkeeping so labour, materials and VAT are split correctly on each invoice. If you use cloud software, our CIS software setup service covers the settings and reverse charge codes.
5. We agree who will prepare the CIS monthly returns and statements, and diarise the deadlines.

Information we'll ask you for

Your UTR, company or business details, any existing PAYE references, and a list of the subcontractors you use with their UTRs, National Insurance numbers or company registration numbers. It also helps to see a few recent subcontractor invoices so we can check how they show labour and materials, and whether the domestic reverse charge applies. If VAT on construction services is new to you, see our page on domestic reverse charge VAT.

Supporting contractors across Kent

We work with contractors throughout Kent, from small Maidstone and Ashford building firms taking on their first labour-only help to developers managing several trades on site. Whether you are just starting to use subcontractors or have realised you should have registered earlier, send us a message and we will tell you what needs to happen next.