Your Essential Guide
Have some questions about construction accounting and what it could mean for you? Then you have come to just the right place! We are Outsource Financial Solutions, and we have years of experience when it comes to delivering accounting services to clients in the construction industry. Working with companies of all sizes, we tailor our approach to meet your needs.
If you have ever asked yourself, ‘Who needs to register for CIS?’ or ‘How does CIS work for contractors and subcontractors?’ then you’ll love this handy guide.
Summary
• Construction accounting has many unique rules and regulations. An experienced team is essential
• All contractors need to register for the Construction Industry Scheme (CIS). This includes limited companies
• Missed CIS deadlines or incorrect deductions can lead to penalties and increased costs
What Type of Accounting is Used in Construction?
We are often asked how our construction accounting services differ from those used for other companies. That answer is that they are highly specialised. Every single construction project is unique, and this means that costs can be hard to predict. Things like location, the availability of subcontractors, the weather and materials can all play their part in affecting your profits. Then you have industry-specific regulations like the Construction Industry Scheme, plus the need for job costing. All of this means that you need an accountant who has worked with clients in the construction industry before.
What is the Construction Industry Scheme (CIS)?
What is CIS in accounting? What is CIS for construction? Both of these questions have exactly the same answer. CIS stands for Construction Industry Scheme, and it is a tax system that was put together by the UK government to regulate tax payments within the construction sector more effectively. It makes sure that tax is correctly deducted at the source before payments are made, and has made the process of collecting tax revenue much more straightforward.
To help make things clearer, we’ve broken everything down in plain English in our dedicated guide:
What is the Construction Industry Scheme?
Who Needs to Register for CIS?
If you are a contractor that pays a subcontractor to carry out construction work in the UK, then you need to register for the scheme. How does CIS work for contractors and subcontractors? Well, if your business makes construction payments and receives them, you are classed as both a contractor and subcontractor. We know that this might seem confusing, and that’s why we are on hand to help. We’ll take a close look at your operations and tell you what you need to do next, ensuring that you are operating in full CIS compliance.
Do Limited Companies Fall Under CIS?
There’s a little bit of a misconception that limited companies don’t need to register for CIS, so let’s bust that myth right away. If you run a limited company and you pay others for construction, then you must register as a contractor. If you’re worried about the process of registering and aren’t sure what you need to do, we are here to help you.
What Happens if CIS Deductions are Wrong?
Whether it’s missing CIS return deadlines or messing up your calculations, you could end up having to pay back the correct amount you owe or could even face a penalty. As your trusted team specialising in construction accounting, we will ensure that your returns are filed on time and your deductions are correct.
Talk to Us
Want to find out more about us and what we do? Then get in touch today. We would love to talk you through our past experience and answer any questions that you have.
