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02 October 2012
DAVID KIRK reflects on the quirks of the construction industry scheme
KEY POINTS
- The CIS operates well in the main.
- Recovering deductions already paid by the subcontractor.
- Condition B of regulation 9 of the CIS Regulations.
- Allocation of CIS deductions against other taxes.
There are some in HMRC who have the curious idea that not everyone who works in the construction industry is totally honest.
Don’t ask why but whatever the reason it means that construction companies are singled out for special treatment when it comes to tax.
The result is the construction industry scheme (CIS). Under this scheme in most circumstances anyone paying for construction labour unless operating PAYE will have to deduct tax at 20% or 30%.
The idea is that the tax is allocated against the recipient’s tax bill so that HMRC are guaranteed a large...
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