What is CIS? It means Construction Industry Scheme, and it is the payment that has been made between the contractors and the subcontractors. In short, it would be the things that will help them go through the professional contract that they are in. If you are interested in understanding it better, then this source has some of the things that you ought to know that might just help you out with it. 

What exactly is CIS payroll?

CIS is basically the scheme in which the payments are processed between the contractors and the subcontractors of a specific project. It can occur from an in-house basis or outsourced from a company that specializes in it. In this, the contractors would process the payments at the same time, in which they would do their own payrolls. All the deductions that are made under the CIS would be delivered straight to the HMRC. Then it is going to be shown to the subcontractors so that they are aware of what is happening. 

CIS applies to whom?

CIS applies to all contractors as well as subcontractors in the industry, and you just have to meet the specific qualifications. For example, if you spend over a million pounds in construction for at least a three-year period or if you already have subcontractors, you would then be considered a contractor. On the other hand, if you have completed work under being employed by a contractor, then you qualify as a subcontractor. It would be necessary to have this clearly defined, as this would help you in the stipulation of the legal taxes that you might have to pay later on. 

Who does CIS cover?

If you are somewhat of a freelance contractor, or if you already qualify as a contractor, then it is highly likely that you are covered by CIS. Understanding if you are covered under this helps you out a lot in figuring out what your next step should be. For example, if you are already a top-level contractor, then you have to make sure that you are going to enroll in the CIS as it would be required under the law. 

CIS exemptions

However, it would still be necessary to learn that there are some exemptions under the cis such as architects, as they are fully exempted from the CIS. They are able to do their work but would not have to enroll under the CIS. If you think that you might be exempted, you can always check their list of exemptions on the HMRC website. It would help out if you were able to figure it out as early as now so that you would be able to manage things better on your side.