The simplest way of registering for CIS is online at HMRC's website. The steps below assume you are registering for CIS as self employed.
If you're sole trader or self employed and working in the construction industry you have to register for the Construction Industry Scheme (CIS). If you don't - then payments you receive for your work will have 30% deducted from them as taxes and given to HMRC as tax payments on your behalf.
When you register for CIS these deductions are reduced to 20% when you register for "net payment" status and removed entirely when you register for "gross payment" status.
"Gross payment" is the best option for your cash flow but you're 1) expected to make your annual tax calculations and payment yourself 2) you need to meet certain conditions in order for HMRC to give you this status.
Main benefit of registering for Net Payment is that the tax withholdings made to you by your employer will be reduced to 20%. You'll still likely end up overpaying your taxes by the end of the year and will need to claim a refund.
With gross payment status HMRC will no longer ask your employer (contractor) to withhold tax payments that are made to you and it is your responsibility to prepare and pay your taxes. However in order to get this status you need to meet the following criteria
Our friendly taxbot helps you understand your personal income tax situation and suggests ways to reduce your tax bill.
TaxScouts will handle the sorting of all your tax documents needed for self assessment & stores them securely online.
A dedicated AAT certified accountant will do your tax return and take care of tax audits.