Construction Industry Scheme (CIS) Service

World class accounting from award winning chartered accountants you can trust

We Have Open Minds

What is the Construction Industry Scheme?

The CIS (Construction Industry Scheme) is a tax deduction scheme, whereby tax is removed from payments relating to construction work. The CIS scheme is not applicable to employee payments, as these are protected by the PAYE (Pay As You Earn) structure of deducting tax at source. Though the operation of CIS lies mostly with that of the individual who makes the payments, tax deductions can vary the degree at which tax is subtracted by specialists like Nordens is subject to the position of the receiver. At Nordens, we’re here to help you understand exactly what CIS is and how we can assist you with it.

Why Use Nordens For Your (CIS) Construction Industry Scheme Calculations?

CIS applies to the payments made between a contractor and a subcontractor. Should the subcontractor pass three assessments – the business, turnover and compliance tests – and is registered with HMRC (HM Revenue and Customs), they’ll receive gross payments via the contractor. The ideal situation is that the subcontractor registers for gross payments. However, if they aren’t eligible due to a failure in one of any of the three tests, they are still able to register with HMRC to certify that tax is only subtracted at the lesser amount of 20%, rather than at the higher rate of 30%.

All very complex – we know. Although not to us, as at Nordens, we are more than happy to take care of this on your behalf. In fact it’s our job! Having spent many years navigating the finances of the construction scene, Nordens are proud to be fully versed in CIS regulations and want to help you get to the bottom of all of the necessary paperwork to finally reap the benefits you deserve. To find out more about CIS – perhaps about deduction statements or reclaim management – call Nordens today!

Our Expert CIS Scheme Service

Nordens premium service is designed to support you in your construction industry scheme calculations and formulations.
Our highly qualified ACCA accounting team can handle even the most complex CIS situations.

CIS Registration

CIS Calculations

CIS VAT Attribution

Expert ACCA Accounting Advisors

Dedicated Account Manager

Frequently Asked Questions

Here at Nordens, we know that all of this information can feel overwhelming – in fact – we receive questions almost everyday from business owners who are equally tied up in knots. Here are some of our more common quibbles regarding CIS:


The CIS system relates to each payment made within a construction contract that involves construction operations and that is not an employment contract. CIS is applicable when there are two distinct parties – one party is a contractor, whilst the other is a subcontractor. Contractors can either be public bodies with an average yearly spend of £1 million or more for the last three years, or companies that aren’t within the construction industry, but have paid at least £1 million for construction jobs for the past three accounting periods.


CIS involves the contractor – via experts like Nordens – deducting the tax at source on all the payments made to the subcontractor. The deduction of the tax is dependent on the subcontractor’s registration status. The next three situations are possible:

If the subcontractor isn’t registered, then the contractor has to have 30% tax deducted from expenses made to the subcontractor (expenses do not include the VAT charged by the subcontractor and the price of materials).

If the subcontractor is registered – but doesn’t meet the requirements to have gross payments – the contractor should subtract 20% tax from the payments. Should the subcontractor be unable to complete the qualifying tests to be permitted gross payments, it makes more sense that the subcontractor register in order to receive tax deducted at 20%, rather than at 30%.

If the subcontractor is registered and receiving gross payments, then the contractor won’t subtract any quantities from the payments. The tax will later be accounted for on the subcontractor’s annual Tax Return. This is the most favourable situation for the subcontractor.


So as to qualify for gross payments from a contractor, the subcontractor has to prove it can complete these three tests:

Turnover Test: This sets a minimum limit on a qualifying subcontractor’s yearly income.

Business Test: Here, the subcontractor needs to carry on with construction projects in the United Kingdom, and the company has to be operated principally via a bank account.

Compliance Test: Inside twelve months of the closing date of the application, every individual and partner within the business should have fulfilled all their tax requirements, regarding either Corporation Tax or Income Tax. Furthermore, they have to supply all the data and financial records asked of them regarding the company, or their share in the earnings of that company.


Subcontractors are able to register online for CIS, or, call the CIS helpline through HMRC. Information on registration, useful guides on CIS, and further assistance are all found on the HMRC website, under CIS.


Your preliminary statutory accounts must be filed 21 months after registration with Companies House. From then on, you’ll need to submit your accounts 9 months after the accounting year of your company. If you file past the deadline, you may incur a fine of up to £1,500, depending on the delay of your payment. If you operate a small company, you needn’t submit a full set of your accounts to Companies House. Instead, you can choose to send a shortened form, which will summarise the main ideas, and typically omits the profit and loss accounts. The full-length version, however, will have to be forwarded to HMRC and shareholders, along with the Tax Return for your business.


The subcontractor will need to maintain adequate records, so as to finalise its Tax Returns and illustrate the direct price of materials.

HMRC should be told of any changes in regards to the subcontractor’s company. This includes if it stops trading, if it changes business address, and any modifications to the company’s structure or ownership.

The subcontractor needs to arrange for the contractor both a satisfactory and a precise report. This will allow the contractor to authenticate the subcontractor’s registration.

Should false documents or statements arise throughout the registration procedure, the subcontractor could be accountable for a penalty of £3,000. For failure to submit records, a £300 fine (on top of daily penalties) can be enforced.

If the subcontractor is unable to conform with each of the qualifying tests for gross payments, then the registration can be rescinded.

Beyond Accountancy

At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.

Nordens Strategic

Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.

Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.

Accounting 2 You

Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.

Voted as EXCELLENT - 9.9 out of 10 based on 170 reviews

<
Chris Dyer

Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

Read more reviews on Trust Pilot

Jamie Brown

Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

Read more reviews on Trust Pilot

Simon Rose

Director - Rose Opticians

I have been using Nordens Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

Read more reviews on Trust Pilot

Rebecca Bossick

Founder & Director - Physio LDN

Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.

Read more reviews on Trust Pilot

James Aconley

Principal - Pauline Quirke Academy

Great accountants, always available to offer advice. The team have transformed my business.

Read more reviews on Trust Pilot

Christopher Wilce

Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

Read more reviews on Trust Pilot

Dave Hodges

Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

Read more reviews on Trust Pilot

Tony Charles

Founder - Foundation Sports Limited

A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.

Read more reviews on Trust Pilot

Peter Horlock

Managing Director - Prime Time Boilers

I have been with Nordens for many years now and they are a great accountants.

Read more reviews on Trust Pilot

Simon Cushing

Founder - Vivid Finishes

We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.

Read more reviews on Trust Pilot

Andrew Martin

Managing Director - AMD Interior Architecture

Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

Read more reviews on Trust Pilot

James Robinson

Director - Forma London

Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!

Read more reviews on Trust Pilot

>
Latest News

We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.

Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Five Types Of Business…
Tax can be a painful subject and the chances are, you don’t want to pay it. However, in most cases it is essentially just another cost of doing business. What is business tax? If you run a business in the UK, there are va...
Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Contractor Or Employed? How…
Earlier this year we reported how TV’s popular Lorraine Kelly defeated HMRC at an IR35 tax tribunal, successfully appealing a £1.2m tax bill. Now Christa Ackroyd and Helen Fospero are the latest TV presenters to argue against h...
Nordens TV

We love making videos that break down convoluted accountancy jargon into plain-talking, actionable and accessible facts.

Business Turnaround Strategies
Business Turnaround The 5…
Business Turnaround The 5 Strategies For Success The business world is full of successful turnaround stories, not least Steve Jobs, Walt Disney and Donald Trump. While there are also countless examples of businesses that fail...
VAT For Beginners
VAT For Beginners
A beginner’s guide to VAT Businesses have to register for VAT once they hit the £85k threshold, but did you know that there may be advantages to you registering your business even if your turnover is below that? In this vide...
  Why I Founded Nordens
Accounting 2 You

In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

Mark Norden Signature

Mark Norden
Founder

We're Professionally Certified

Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!