The Construction Industry Scheme sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry and certain other businesses.

Under the scheme, all payments made from contractors to subcontractors must take account of the subcontractor’s tax status as determined by HM Revenue & Customs. This may require the contractor to make a deduction, which they then pay to HM Revenue & Customs, from that part of the payment that does not represent the cost of materials incurred by the subcontractor.

The legislation started on the 6 April 2007 and the new scheme aims:

1. To reduce the regulatory burden of the scheme on construction businesses.
2. To improve the level of compliance by construction businesses with their tax obligations.
3. To help construction businesses to get the employment status of their workers right.

We have dedicated members of staff who specialise in C.I.S issues. If you are an existing contractor or require advice on subcontractors contact janeta@mca.ac who will be happy to assist you.