Life as a contractor can be tricky. Many workers who work like this find themselves stuck in a minefield of bureaucracy, without the time to deal with the administration of a Limited Company or working on a short contract. For those in this position, singing up with a contractor umbrella can be the best option, providing peace of mind and complete security. Similarly, if you want to receive your income in the most hassle-free way possible, it is often worth speaking to a cis payroll service. Payroll services like these are aimed at established contractors, sub-contractors, sole traders and partnerships.
If you are a sub-contractor and would like to register on one of these schemes you need to go to the HMRC website. You will be given a Unique Taxpayer Reference number that will identify you on the revenue and customs system, and will need to send that, as well as your name and National Insurance number, to the company you would like to register with. You will be taxed at 20% on this income at source as long as you have a UTR number. Those without such a number will have tax deducted at 30%. Contractors working on this basis must usually find their own work and negotiate their own rates. They will also be required to fill in a tax return at the end of the year in order to claim all of the work relate expenses incurred in the course of the year. You can offset these expenses against the tax paid at source throughout the year.
The Construction Industry Scheme, or CIS, largely applies to contractors and subcontractors who are in mainstream construction work. The scheme allows a separate company to take on the role of the contractor in terms of administrative tasks associated with the job. It was designed by HM Revenue and Customs, which explains why those who want to register must first sign up with the government body. Some contractors need a contractor umbrella for a few weeks, whereas others will use their services for a number of years. They tend to offer a good amount of flexibility, not necessitating a fixed contract.
Clearly, a contractor umbrella can offer a number of advantages to those working in the construction industry and other relevant areas. The security of being on a cis payroll can provide valuable security to those who lack the time or skills to deal with the administrative tasks that come with this kind of work. Making the most of payroll services can be one of the easiest ways to give yourself peace of mind when it comes to financial matters.
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