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Construction Industry Scheme (CIS)

Created on  | Last modified on 

Summary

Find out how CIS applies to you as a subcontractor or contractor, and how to record CIS payments in Sage Sole Trader.

Description

CIS is a tax scheme that applies to construction work in the UK. If you're a subcontractor, your contractor deducts tax from your payments before paying you. If you're a contractor, you deduct tax from payments to your subcontractors.

How you use Sage Sole Trader depends on your CIS role.

If you're a CIS subcontractor

As a subcontractor, your contractor deducts CIS tax (usually 20%) before paying you. For example, if you invoice £1,000, your contractor deducts £200 and pays you £800.

NOTE:

CIS is only available in the paid Sage Sole Trader plan.

 

 

Keep your CIS statements

Keep all payment and deduction statements from your contractor. These show the gross amount, deduction rate, and net payment. You need these as evidence for your tax return.

If you're a CIS contractor

Sage Sole Trader isn't suitable for CIS contractors. Contractors need to verify subcontractors with HMRC, calculate deductions, submit monthly returns, and produce payment statements.

These features aren't available in Sage Sole Trader. If you're a contractor, consider one of the following:

  • Sage Accounting (includes CIS)
  • Sage 50 Accounts (full CIS module)

For CIS compliance, go to GOV.UK.