Know about Payroll and CIS

Payroll is related to salary and benefits and mostly employer’s business. Due to the introduction of Real Time Information (RTI), it has become a weekly or monthly affair. It is, primarily, employer’s responsibility to deduct correct amount of tax and national insurance from the salary and benefits.

Employer has to pay the withheld tax and national insurance to HMRC on monthly or quarterly basis. There is a fine if monthly report is not submitted to HMRC in time or correct amount of tax and national insurance withheld is not paid to HMRC in time.

Construction Industry Scheme (CIS) is related to the contractor and sub-contractor who are in construction business. The contractor has to register with HMRC to operate CIS scheme and the sub-contractor has to register with HMRC so that they are verified. The contractor has to deduct tax at source on every payment they make to subcontractor. The withheld tax has to be paid to HMRC in time.

The delay in submitting CIS returns or delay in paying withheld tax will subject to penalty and interest.

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