Xero helps manage Construction Industry Scheme obligations in less time
If you work in the UK construction industry, or pay subcontractors for construction work, then you probably need to comply with special tax rules and regulations within the Construction Industry Scheme (CIS).
CIS sets down rules for payments made by contractors to subcontractors, and works alongside the standard self assessment and VAT schemes a business or sole trader must adhere to. There are lots of tasks and calculations that you need to undertake.
What do I need to do?
- Verify if your subcontractors are registered for CIS, their type of business and if you need to deduct payments
- Deduct CIS from your subcontractors at the right rate
- Submit monthly returns & pay any deductions to HMRC – even if you’ve made no payments
- Send monthly payment & deduction statements to any subcontractors from whom you’ve taken deductions
- Keep records of all payments and deductions
- Register with HMRC so that you’ll get taxed at the right rate. The standard CIS rate is 20% and if you do not register, then you will automatically be taxed at the top rate (30%).
- You can apply to be paid gross, so that won’t have CIS deducted before you get paid. You will have to pay all your tax & National Insurance at the end of the tax year instead.
- Offset CIS deductions suffered in your payroll Employer Payment Summary (EPS)
Manage your CIS obligations in less time
Announced today at Xerocon London, Xero aims to provide a great experience for contractors, subcontractors and accountants involved in managing CIS. Deductions will be automatically calculated from subcontractor invoices, and in the future you’ll be able to submit returns to HMRC with one click – so you can be confident you’re paying the right amount.
We already have some customers beta testing the following features:
- Add contractor and subcontractor information into Xero
- Automatically calculate CIS deductions before making payments
- Automatically produce contractor monthly CIS Return
- Create subcontractor payment and deduction statements
And in future releases, we’ll launch more features, including:
- CIS suffered report
- Enable CIS deductions on cash transactions
- File HMRC submission with one click
- Verify subcontractors from within Xero
- Payroll integration
- Bulk email of payment and deduction statements
If you’re interested in joining our CIS beta, please email firstname.lastname@example.org and we’ll send a form for you to complete and send back to us.
The post Xero helps manage Construction Industry Scheme obligations in less time appeared first on Xero Blog.
Source: Xero Blog