If you are a construction business in the UK, you have to comply with tax rules set by the Construction Industry Scheme (CIS): HMRC – Construction Industry Scheme.
The CIS applies to contractors, subcontractors and any business that has a high annual spend on construction – if your company is involved in construction, you may have to register with HMRC under CIS.
HMRC expects all businesses in the construction industry to keep records of all payments made – if you are required to pay CIS, you have to tell HMRC every month about each payment you have made to subcontractors – to do this, you have to submit a monthly return.
Manually calculating the right CIS to deduct each month across each and every transaction, can be stressful and prone to costly mistakes. In addition, inputting the right information and filing this monthly to HMRC is time-consuming and inefficient.
Xero has recently launched a Construction Industry Scheme add on which helps you to meet those obligations. With Xero cloud accounting software, you can:-
- automatically calculate the right CIS tax deductions and file your monthly returns directly from Xero;
- view your cash flow at any time with the online dashboard;
- invoice clients and pay subcontractors faster with online invoicing;
- store all your documents online in one secure, central and easy to access place;
- verify your subcontractors with HMRC through the software so you know what rate of tax to deduct;
- automatically calculate and apply CIS
- deductions to your invoices and bills;
- download payment and deduction statements to manually send to your subcontractors.
The Xero CIS contractor add on has special features:-
- online filing of monthly returns with HMRC from Xero;
- bulk email payment and deduction statements to subcontractors from Xero.
For further help or advice regarding Xero and how this can help you meet your Construction Industry Scheme obligations, please do not hesitate to contact the team on 0161 761 5231 or email theteam@horsfield-smith.co.uk.
