All Trade Partners...
As you are aware Opun are participants in the Construction Industry Scheme (CIS).
This is a legal obligation for us.
Trade Partners who have been with us for some time will be aware of this but we have found that some of our newer Partners and some who have been dormant may not be.
In light of this we thought it would be helpful to send a message to all so that anyone who has slipped through the net has a chance to register.
In short the CIS requires Opun to make deductions to the HMRC on the labour portion of your work for us. The rate of deduction varies but essentially it is at present 30% if you are not registered and 20% if you are.
There is a process where a Trade Partner can apply to be Zero rated i.e. they will have no deductions made. This will require a Trade Partner to apply to HMRC who will apply a set of rules and decide if this Zero rating can be given.
Without going into too much detail to qualify for zero rating a Trade Partner will have to fulfil the following:
- Sole Trader – A turnover of at least 30k not including materials or VAT
- Partnership- As above but for each partner or at least 100k
- Limited Companies – As above but for each director or at least 100k
The HMRC will look at the last 12 months of trading but you must:
- Have paid tax an NI
- Do construction work
- Run your business through its own bank account
The final say is with HMRC.
The above is a very brief point guide and full details can be found on www.gov.uk.
In any event this is not lost money and will go against any taxes due to HMRC at the end of your year.
In the normal administration of CIS you can offset deductions against PAYE, NI and other things.
Opun do want to pay you everything that you are due and don’t want you to have any nasty surprises.
If you use an accountant, they too will be able to advise.