As of my last update in April 2023, the Construction Industry Scheme (CIS) does not issue physical CIS cards. Previously, CIS cards were used as a form of identification for self-employed construction workers registered under the CIS, indicating their status and the deduction rate for their taxes. However, this practice has been discontinued, and the focus now is on digital records and registration with HMRC.
Understanding the CIS
Under the CIS, contractors deduct money from a subcontractor's payments and pass it to HM Revenue and Customs (HMRC). These deductions count as advance payments towards the subcontractor's tax and National Insurance. Standard deductions are made at 20% for registered subcontractors and 30% for those who are not registered.
Getting Registered for CIS
To comply with the CIS:
- Register as Self-Employed: This involves obtaining a Unique Taxpayer Reference (UTR) number from HMRC. Registration for Self Assessment is crucial for managing your tax obligations.
- Register for CIS: Once you have your UTR, you can register for CIS. This indicates to HMRC and potential contractors that you're a legitimate self-employed construction worker under the scheme. Registration can be done online or by contacting the CIS helpline.
Refunds and Rebates
Many CIS workers find that the deductions over the tax year exceed their tax liability. If this is the case, you're entitled to claim a refund or rebate after submitting your annual Self Assessment tax return. This process can result in a significant refund, depending on your actual tax liability versus the amount deducted under CIS.
No Physical CIS Card
- If you're concerned about not having a physical CIS card, it's important to note that modern compliance does not require one. Instead, focus on ensuring your CIS and Self Assessment registrations are up to date.
- Your UTR number and CIS registration status serve as your primary identifiers within the scheme.
Filing CIS Tax Returns
For subcontractors under CIS, annual tax returns are essential. These returns account for your income and the taxes already paid through CIS deductions. Professional assistance from an accountant familiar with CIS can be invaluable in maximizing your allowable expenses and optimizing your tax position.
If you're unsure about your current registration status or need guidance on CIS compliance and tax filing, it's advisable to consult directly with HMRC or a professional accountant specialized in construction industry taxation.
