Common CIS Mistakes and How to Fix Them
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Common CIS Mistakes and How to Fix Them
The Construction Industry Scheme (CIS) is an essential tax regime designed to regulate payments between contractors and subcontractors in the construction industry. CIS registration can be complex, and businesses can often make costly mistakes that causes administrative headaches with HMRC.
At BCS Accountants, this month’s blog looks at common CIS mistakes and how to fix them. For more information, contact us on 01524 824111.
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Failing to Register for CIS on Time
One of the most common mistakes made by both contractors and subcontractors is failing to register for the Construction Industry Scheme on time. Contractors are responsible for deducting money from payments made to subcontractors and passing these deductions to HMRC.
Subcontractors need to register so they receive payments under the scheme at the correct rate. Late registration can result in fines from HRMC, payment delays and strained business relationships.
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Deducting the Wrong Amount of Tax
The deduction rate depends on whether your subcontractor is registered, unregistered, or on gross payment status. If you don’t use the correct rate, you can end up overpaying or underpaying to HMRC.
Make sure you are aware of every subcontractor’s verification status before each job. If you have used the wrong date, you can update your records and submit a corrected return as soon as possible.
Missing CIS Return Deadlines
CIS returns are due by the 19th of each month. If you are late, HMRC charges penalties for each day you miss. If you miss the deadline, you must file a return as soon as possible. The sooner you submit your return, the smaller your fine will be.
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Not Keeping Records Properly
It is a requirement to keep CIS records for at least 3 years. This includes payment statements, invoices, deduction details and verification checks. It is recommended that you use digital accounting software.
With this, you can ensure your records are safe and backed up. Additionally, accounting software reminds you of upcoming deadlines.
Not Having an Accountant
Trying to handle CIS on your own can lead to missed deadlines, wrong deductions, or wrong paperwork. At BCS Accountants, we provide CIS accounting to support you and ensure everything is up to date.
Working alongside you, we can review your returns and check for any mistakes or missed claims. We can also help you plan ahead, avoid penalties, and ensure all records are up to date.
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Contact BCS Accountants
For accounting advice, contact our team at BCS Accountants. We are based near Carnforth, but cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Care of – TRW Accountants
95 King Street
Lancaster, LA1 1RH
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
