Construction Industry Scheme (CIS)

​

In respect of Property Development and Renovation activities, Hawkers is considered by HMRC to be a Primary Contractor.  This means that HMRC requires us to deduct money from our subcontractors payment and pass it to HMRC directly.  This is a legal obligation that is placed upon us.

​

The Construction Industry Scheme was introduced by HM Revenue and Customs (HMRC) to combat tax evasion in the construction sector and ensure that tax and National Insurance contributions (NICs) are collected correctly at the source 
 

By requiring contractors to deduct money from subcontractor payments and pass it directly to HMRC, the scheme ensures that taxes are paid throughout the year rather than in a single lump sum, reducing the risk of unpaid tax bills.

​

Hawkers (Development) Limited is considered by HMRC to be a Primary Contractor in respect of construction / property development activities.  As such we are required to verify tax status of subcontractors and make deductions from payments based on that status.  These deductions act as advance payments toward the subcontractor’s tax and National Insurance.

​

Subcontractors who register with CIS benefit from lower deductions (you can actually apply for zero deductions to be made).  If you don't register than the deductions can be up to 30%.  So it is worth registering (in any event no money is lost, the 30% simply is a pre-payment against a tax bill).  It is also worth noting that the deductions do not apply to invoices for materials.

 

Further information and guidance is provided here; Construction Industry Scheme (CIS) - GOV.UK 

​

It is important to note that you can apply to be paid gross (without any deductions).  It is a simple online process. This means we will pay your full invoice without any deductions passed to HMRC.  To register for gross payment status register here; What you must do as a Construction Industry Scheme (CIS) subcontractor: How to get gross payment status - GOV.UK