Construction Industry Tax Scheme (CIS)

This page provides links to our resources for CIS - the Construction Industry Scheme.

The CIS scheme was radically overhauled from 6 April 2007 onwards, with the old paper based scheme going, and a new paperless scheme going - with a raft of new pitfalls and penalties coming in.

CIS applies to all businesses in the Construction Industry - builders, developers, contractors, plumbers, electricians, roofers, bricklayers, carpenters, glaziers and many other trades - in some cases it also applies to services like landscaping and cleaning. However it does not apply to professional services like Surveyors and Architects.

The CIS scheme places and obligation on Contractors to check registration details for Sub Contractors working for them, and in some cases to deduct tax from them at source. A business may be a Contractor and a Sub Contractor at the same time.

Of critical importance with anything to do with CIS the issue of employment status - is someone working for you employed or self employed? There are strict rules to be followed for this, and you cannot just assume someone is self employed. HM Revenue and Customs will regularly inspect contractors records and if employment status decisions are incorrect - i.e. sub contractors are being treated as self employed, when HMRC think they should be employed, penalties and a back tax bill will follow - these will be the responsibility of the Contractor not the Sub Contractor. The important thing to note is you cannot assume self employment, Contractors must review the status of each worker and ensure self employed status is correct.

However, with some simple steps it is often possible to strengthen the self employed status of workers. At a minimum a contract is needed (which should reflect genuine working arrangements, and not be a scam); there are some other simple steps to take as well.

HM Revenue & Customs guidance on employment status is often worryingly incorrect, and heavily biased towards employed status. Pay attention to HMRC guidance, but do treat it with caution.

Anecdotal evidence about the operation of the new CIS scheme suggests HMRC are taking a very aggressive stance to compliance - eg there are stories of refusals to renew gross payment status due to tax underpayments of as little as Ł5 against the business owners Self Assessments - its clear that HMRC expect gross payment holders to be squeaky clean.

For a guide to the new CIS scheme from 6 April 2007, click here

For a practical guide to how the new CIS scheme, post April 2007, operates, click here

For out CIS support service specification - designed to help you get to grips with CIS, click here

For a copy of our seminar slides, from our seminars on the new CIS arrangements, click here

For a guide to employment status, click here

For a template self employed contract, click here
(Garbetts clients - if you would like a word copy, please e-mail us)

For guidance on employment contracts if you are employing staff, rather than having sub contractors, click here
(Garbetts clients - if you would like a word copy, please e-mail us)

You may also find our Employment and Health & Safety service of use, click here

For Further information, please contact us

Garbetts Chartered Certified Accountants

E-mail: office@garbetts.com

Arnold House, 2-6 New Road, Brading, Isle of Wight, PO36 0DT.
Telephone: 01983 400350. Facsimile: 01983 404016.