Understanding construction industry scheme

UNDERSTANDING CONSTRUCTION INDUSTRY SCHEME

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Created by the HM Revenue and Customs (HMRC), the Construction Industry Scheme (CIS) is a scheme designed to streamline tax from contractors and subcontractors. The main aim of this scheme is to curtail tax evasion within the construction industry. This scheme was the need of the hour given the substantial number of mobile self-employed workers involved in this industry. A special system had to be designed otherwise there is a constant risk of significant loss to the Exchequer.

CIS is applicable to all contractors and subcontractors, be it sole traders, partnership ventures or companies who are employed within the mainstream construction industry. The type of work that comes under the “construction” category comprises of groundwork, general building work like roofing, bricklaying and plastering, repairs, demolitions and alterations.

CIS statutes are applicable to all payments made by a contractor to a subcontractor under a contract of construction, but it is not applicable to employees. One can face expensive penalties in case they fail to comply with the scheme’s rules and regulations. https://financehouseblog.wordpress.com/2017/08/04/understanding-constructionindustry-scheme/

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