The Construction Industry Scheme – 2017 Update
Zoe Stollard of Clarke Willmott provides insight into the Construction Industry Scheme and the changes which have been implemented in 2017.
The Construction Industry Scheme (CIS) is designed to decrease perceived undeclared payments in the construction sector. It requires contractors to register for the scheme and to withhold tax before payments are made to sub-contractors under contracts relating to construction operations. The amount of tax withheld depends on the registration status of the sub-contractor:
- if they are unregistered, 30% must be withheld;
- if they are registered, 20% must be withheld; and
- if they meet certain criteria and register for gross payments, 0% must be withheld.
The contractor must then pass to the HMRC the amounts withheld.
Prior to April 2017, contractors could verify whether sub-contractors were registered and whether they could be paid gross online or by phone. From the 6th of April 2017 sub-contractors must be registered online.
Read the full article here.