The Construction Industry Scheme (CIS) is a vital tax deduction scheme for contractors and subcontractors in the UK construction industry. It requires contractors to deduct tax from payments to subcontractors and pass it to HMRC.
Futurelink Group offers comprehensive CIS-compliant payment solutions tailored to meet the needs of both self-employed workers and those caught under IR35. Here’s how our services can support you.
Understanding the Construction Industry Scheme
- What is CIS?: The CIS is a statutory tax scheme introduced by HMRC to manage tax deductions for construction workers. It applies to most construction work, including site preparation, building, alterations, repairs, and demolition.
- Who Needs to Register?: Generally, all businesses and individuals involved in construction work must register for CIS, except for certain exemptions like architecture and surveying services.
Futurelink Group’s CIS Solutions
Futurelink Group provides three CIS-compliant payment solutions designed to meet the diverse needs of construction workers:
- CIS Payroll – Self-Employed Solution:
- Ideal for workers who have registered with HMRC as self-employed and have a Unique Taxpayer Reference (UTR) number.
- Futurelink handles invoicing, receives payments, processes pay, and deducts 20% tax in line with CIS regulations.
- Workers who are unverified (not registered) are taxed at 30% until fully registered.
- CIS PAYE Umbrella – Employed Status:
- Suitable for workers who do not have self-employed status or are caught inside IR35.
- By opting for the umbrella solution, workers become “employed” by Futurelink, ensuring compliance with CIS and IR35.
- Team Construction Limited, part of Futurelink Group, deducts relevant tax and NI before paying the worker, eliminating the need for a tax return.
- Gross Payment Status Solution:
- For workers who meet specific criteria, Futurelink can assist the worker in obtaining Gross Payment Status, allowing them to receive payments without tax deductions.
- This option requires registration with HMRC and meeting certain conditions such as turnover and having their own subcontract workers.
Benefits of Using Futurelink Group’s CIS Solutions
- Compliance and Risk Management: Futurelink ensures full compliance with CIS regulations, reducing the risk of penalties and fines.
- Administrative Simplification: Our services handle all tax deductions and compliance, minimising administrative burdens for workers.
- Maximising Net Income: By optimising tax deductions and ensuring compliance, Futurelink helps workers maximise their take-home pay.
- Eligibility for Benefits: Workers using the umbrella solution are eligible for statutory benefits like Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP), along with a comprehensive workplace pension scheme.
CIS vs. PAYE vs. Gross Payment Status
Here’s a comparison of CIS, PAYE, and Gross Payment Status:
- CIS: Contractors deduct 20% from payments to registered subcontractors and 30% from unregistered ones. Suitable for self-employed subcontractors who want to manage their tax obligations through annual returns.
- PAYE: Employers deduct income tax and National Insurance Contributions (NICs) from employees’ wages. Suitable for workers caught under IR35 or those preferring employment status.
- Gross Payment Status: No tax deductions are made by the contractor. Subcontractors pay tax and NICs through their annual tax return. Requires meeting specific HMRC criteria, such as timely tax payments and sufficient business turnover.
Comparison Table
Payment Solution | Tax Deductions | Benefits | Suitability |
CIS | 20% or 30% | Maintains cash flow, annual tax return | Self-employed subcontractors |
PAYE | Immediate deductions | Immediate tax compliance, employment benefits | Employed or IR35-caught workers |
Gross Payment Status | No deductions | Improved cash flow, flexible tax management | Established businesses with good financial records |
Conclusion
Navigating the CIS can be complex, especially for those caught under IR35. Futurelink Group’s CIS-compliant payment solutions provide a straightforward and compliant way to manage your tax obligations, whether you’re self-employed or employed. Our expertise ensures that you remain compliant with HMRC regulations while maximising your earnings.
Get Started with Futurelink Group
If you’re looking for expert guidance on CIS compliance or need assistance with your payroll, please contact one of our consultants at 01923 277900 or visit our website to explore our services and discover how we can support you. You can also contact us directly to discuss your specific needs and receive personalised advice from our experienced team.
Craig Moss
Craig Moss is a seasoned professional in the employment and recruitment industries, based in Kings Langley, UK. With over 30 years of experience, including a successful tenure as a central London realtor handling properties up to £3 million, he now leads an exciting management role at Futurelink Group. Specialising in compliant payroll solutions for contract recruitment, Craig helps clients increase margins by up to 30% while navigating complex legislation. His people-focused approach, honed through decades in sales and people management, ensures both recruiters and workers benefit from tax-efficient, compliant solutions. Passionate about building strong relationships, Craig thrives on delivering results that drive business success.
