The role of Umbrella Companies has become vital in the last two decades,as they provide a unique employment solution, where workers can undertake a series of assignments with different end clients while working through the same employer. Like any other Umbrella Company, DNS Umbrella also acts as an intermediary between the contractors it employs and its clients or an agency. Since an Umbrella company plays a role of anintermediary, it enables a contractor to be free from the burden of setting up their ow limited company,reduces their administrative work and responsibility of complying with the taxman.
Umbrella companies have spread their wings and are influencing different sectors in the country. Among which, CIS or the "Construction Industry Scheme", holds a significant place. The Construction Industry Scheme is referred to be a unique set of rules, crafted by the tax office to monitor the payments made are made to a contractor working in the construction industry. Since it’s introduction in 2007, all construction industry workers have to register themselves under the scheme with HMRC or work through a registered business.
The work that comes under the CIS includes all construction activities undertaken in the UK on a building or structure, civil engineering work like roads and bridges; and includes laying of foundation, groundwork, construction, alteration, repair, extension, demolition and dismantling.
DNS Umbrella offers two ways in which a contractor can undertake work in the construction industry – either as a Self-employedworker or through PAYE Umbrella.The options are explained below.
If the worker is classed as a self-employed, they will first need to register with HMRC as a sole trader and under the CIS by calling HMRC helpline on 0845 915 4515. They will need National Insurance number to register with the department, if not available they should call the Department for Work and Pensions on 0845 600 064to obtain one.
Once registered with HMRC, they will receive a Unique Tax Reference (UTR) number which is a 10-digit number.
Under the CIS Self-employed Umbrella solution, DNS Umbrella will be the contractor responsible to make CIS deductions before transferring the money to the worker. The rate of deduction is usually:
DNS will then provide a certificate confirming the deductions to the worker each month and submit the monthly CIS returns to HMRC. The worker or subcontractorneeds to file a self-assessment tax return with HMRC at the end of the tax year, to claim allowable business expenses and to pay/claim refund for any underpayment/overpayment of taxes.
Construction Industry Scheme or CIS thrives on making a comfortable environment for its workers and have drafted a framework, which enables one to claim the expenses theyare entitled to. So far the costs have been incurred wholly and exclusively for business, a CIS worker can claim the following -
If the worker is treated as an employee then the above expenses can be claimed provided, they meet the wholly, exclusively and necessarily test.It is advisable that the worker keeps adequate financial records and receipts for 6 years if claiming expenses.
We normally invoice the agencies on a weekly or monthly basis. The worker will receive a pay in their nominated bank account on a weekly/monthly basis after the funds are received from the agency, less taxes depending on the model and our weekly/monthly margin.
To register with us for CIS Umbrella give us a call today on 020 3500 2658 or email email@example.com.