Construction Industry Scheme (CIS) - deductions
Discussion
Looking at setting up a business and the CIS deductions is a bit of a grey area, needing some help.
Im forecasting an annual £800,000 turnover as a subbie to main contractors. The work will be as a civil engineering contractor.
In the experience of pistonheads construction businessmen how long does it take to get to gross payment status if your accounts are in order and keep the tax man happy.
Also, is the deduction off each invoice payment based on an estimate of yearly profits?
Im forecasting an annual £800,000 turnover as a subbie to main contractors. The work will be as a civil engineering contractor.
In the experience of pistonheads construction businessmen how long does it take to get to gross payment status if your accounts are in order and keep the tax man happy.
Also, is the deduction off each invoice payment based on an estimate of yearly profits?
Deductions are monthly off the amount of labour you use. You can find pretty much everything you need here
https://www.gov.uk/what-you-must-do-as-a-cis-subco...
I pretty much waited until I was comfortable in the accounting procedure before I went gross as it all comes out in the wash so to speak at the end of the year (unless HMRC owe you which then they will drag their heels in paying you back!). All in all we were fine working with it for a couple of years and our t/o was a lot greater than what you suggested.
Just one word of advice, main contractors WILL shaft you, be prepared for them more than CIS!!!
Hope it all works out for you.
https://www.gov.uk/what-you-must-do-as-a-cis-subco...
I pretty much waited until I was comfortable in the accounting procedure before I went gross as it all comes out in the wash so to speak at the end of the year (unless HMRC owe you which then they will drag their heels in paying you back!). All in all we were fine working with it for a couple of years and our t/o was a lot greater than what you suggested.
Just one word of advice, main contractors WILL shaft you, be prepared for them more than CIS!!!
Hope it all works out for you.
Gorgonzola said:
Deductions are monthly off the amount of labour you use. You can find pretty much everything you need here
https://www.gov.uk/what-you-must-do-as-a-cis-subco...
I pretty much waited until I was comfortable in the accounting procedure before I went gross as it all comes out in the wash so to speak at the end of the year (unless HMRC owe you which then they will drag their heels in paying you back!). All in all we were fine working with it for a couple of years and our t/o was a lot greater than what you suggested.
Just one word of advice, main contractors WILL shaft you, be prepared for them more than CIS!!!
Hope it all works out for you.
Thanks Gorgonzola, ya Im expecting it, the cash flow estimates are based on getting shafted! What line of construction work are you in?https://www.gov.uk/what-you-must-do-as-a-cis-subco...
I pretty much waited until I was comfortable in the accounting procedure before I went gross as it all comes out in the wash so to speak at the end of the year (unless HMRC owe you which then they will drag their heels in paying you back!). All in all we were fine working with it for a couple of years and our t/o was a lot greater than what you suggested.
Just one word of advice, main contractors WILL shaft you, be prepared for them more than CIS!!!
Hope it all works out for you.
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