For those that work in the construction industry you need to be aware that you may benefit from your work falling under the Construction Industry Scheme (CIS).
Many construction workers have decided to operate their own CIS registered limited company due to the advantages that the scheme brings.
Most attractively, under the scheme construction workers need to make a monthly deduction of only 20{1602fdfaf682e12f31ec442f8086dd5803c9569b8fe20fc727b6a81e8230cd0f} compared to the 30{1602fdfaf682e12f31ec442f8086dd5803c9569b8fe20fc727b6a81e8230cd0f} they would pay if they do not register. Construction workers are also able to enjoy the additional payment benefits they can receive as a limited company where they can apply for gross payment status.
Once the decision has been taken to create a limited company, workers are free to pay themselves a dividend as they are now a shareholder. They can also take advantage of the greater flexibility creating a limited company brings. You are able to join the Flat Rate Scheme and make the most out of long-term tax planning.
Importantly, if you join the scheme you will be able to get tax relief on pension contributions and make expense claims for the equipment you need to use such as tools.
If you are a construction worker who has not yet become CIS registered your pay will see an immediate deduction of 30{1602fdfaf682e12f31ec442f8086dd5803c9569b8fe20fc727b6a81e8230cd0f} instead of just 20{1602fdfaf682e12f31ec442f8086dd5803c9569b8fe20fc727b6a81e8230cd0f}. While you will be able to still claim business expenses in order to receive corporation tax this will not make up for the difference caused by losing 30{1602fdfaf682e12f31ec442f8086dd5803c9569b8fe20fc727b6a81e8230cd0f} of your income.
What We Can Do For You
As experienced accountants we can help you navigate a new system and make sure you do not miss out on any advantages. We will keep your records and take care of your paperwork leaving you free to get on with your business.
We will look after and manage your business as a limited company. This means you gain access to a range of new schemes and services. These include VAT registration, company incorporation, corporation tax and PAYE registration as well as filling out your CIS registration forms.
Do you work in construction and need assistance in setting up a CIS registered Limited Company? If so, call Keith Keen of SKP Accountancy on 020 8468 1049 or e-mail keith@skpaccountancy.co.uk today to find out more.