Are you trying to get a CIS card because you heard someone mention its countless benefits? That is how most people come to know about the card, but they don’t know what it is or how to apply for it.
But now, with this blog, you will be equipped with all you need to know. We will start by defining what a CIS card is and some of its benefits. We will also see who can apply for the card. Lastly, we will provide you with a guide to getting the card for yourself. So, let’s begin!
If you need more information about the CIS, contact us!
What is a CIS Card?
A Construction Industry Scheme (CIS) card is a registration card that is issued by the HMRC to construction subcontractors. It is provided to those individuals who are registered under the CIS. This scheme allows subcontractors to pay less taxes as it reduces tax evasion. Under CIS, the contractors deduct tax from sub-subcontractor payments. The amount collected is provided to HMRC, therefore ensuring that the applicable tax is paid on time.
Who can Get the CIS Card?
A CIS card is provided to subcontractors who register for this scheme. Under UK law, a subcontractor is someone who works for a contractor. You must be a registered subcontractor with the government, for which you will require your NIC number, taxpayer reference number, and VAT registration number. In addition, you must meet the following requirements:
- You must be self-employed
- You must be working in the construction industry
What Are the Benefits of Getting a CIS Card?
Now that we know what a CIS card is and who can apply for it, let’s learn some of its benefits:
1. Reduced Tax Deductions
If you are a CIS-registered subcontractor, you will have to pay reduced tax on your earnings. This incentive is provided to get the maximum number of registrations to reduce tax evasion. If you are a registered subcontractor, your tax will be automatically deducted, but its rate will be lower.
2. Countless Working Opportunities
Having a CIS card is like being verified as a fraud. The government knows who you are, and therefore you are likely to get more work. Contractors and other clients prefer to work with someone who is registered and possesses a card.
3. Better Reputation
A CIS card allows your clients to know that you have the appropriate skills and experience. They trust your expertise and know that you will give them the value of their money. Therefore, possessing the card lets people know that you are reputable in the industry for your work.
How Do You Get the Card For Yourself?
Getting a CIS card is very simple once you are registered under the scheme, but if you are not, then follow this guide. Ensure that you read till the end so you don’t miss out on any important points.
1. Check the Eligibility Criteria
Firstly, make sure that you are eligible for the Construction Industry Scheme. Although we have highlighted some of the major eligibility requirements, it is always better to visit the HMRC website. In addition, you can contact the helpline to get accurate details on the eligibility criteria.
2. Register for the CIS
Once you are sure that you fulfil the mentioned criteria, register for the scheme. Ensure that you are entering accurate details, such as your name and DOB. In addition, make sure that you have access to all of the required numbers, which include the NIC number, UTR number, and VAT number.
3. Apply for the CIS Card
Once you are registered under the scheme, apply for a CIS card. It is important to mention here that you will require this card to get certain positions. So, if you are already under the scheme and still do not have the card, it’s time to get one.
4. Pay the Registration Fee
It is important to remember that there might be some registration costs that come with getting a card. So, make sure you pay them on time and forward your application.
5. Receive Your Card
Once you have paid your fees and submitted your application, wait for your CIS card to arrive. Once you have it, you will only have to pay 20 percent tax on your salary instead of the higher rate of 30 percent.
If you are not sure whether you qualify for the scheme, visit Accotax!
A Quick Wrap-Up
A CIS card is provided to subcontractors registered under the Construction Industry Scheme. The government provides this scheme to minimise tax evasion and provides a discounted rate of 20 percent to the registered subcontractors. If you get a card under the scheme, you will be eligible for more jobs and have a better industry reputation.
To get yourself a card, start by checking out the eligibility criteria and registering yourself under the CIS. Once that is done, apply for a card and pay the registration fee. Lastly, receive your card and enjoy the perks that come along with it.
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