What is the Construction Industry Scheme (CIS)?
Under the CIS, Building and Construction contractors deduct tax at source from a subcontractor's payments and pass it directly to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor's tax and NI.
For more information visit the government website here
How does Grafter help you manage CIS?
Grafter supports the end-to-end CIS process, from setting up the job specification, through to helping you compile end of period HMRC submissions.
When you set-up a job on Grafter you can select the CIS option. Your account will default to CIS for all future jobs. However you can always change it when you set-up another job if you need to or in your 'My Account' page.
For CIS jobs, all details shown to potential grafters will display that tax will be deducted before payment to them is made. So anyone applying for the job will know upfront that tax will be deducted from their payment.
When someone applies for a CIS job on Grafter they need to provide their UTR and NI number as part of the application process. The platform then looks up their details with HMRC's CIS service to check whether they should be deduced 0%, 20% or 30%.
Once the CIS look-up is complete, the Work Contract will show the correct Gross and Net payment per day for the job specific to that person. So it is clear up-front how much will be deduced and what the actual payment to the worker will be.
When you make a payment for a CIS job, you enter the time worked. The platform automatically calculates the amount to pay the grafter and the amount to withhold for CIS. Using the specific HMRC rates for each person.
You can then use the system to pay the worker the correct amount, excluding the CIS tax which you retain to pay to HMRC. You will get CIS invoices from the worker, available through the platform, with all the payment and tax details.
The 'My Payments' page keeps track of all your CIS payments so you can easily check how much you have paid people and how much to pay HMRC for any period.
This table includes all the details you should need, including the sub contractors UTR and NI numbers. This information can be downloaded as a PDF or CSV for further calculations or for your future records.
This information is for guidance only related to use of the Grafter platform and should not be considered as financial advice which should be sourced from a qualified accounting practice or other reputable source.