The Construction Industry Scheme (CIS) requires those who pay for construction works (‘contractors’) to withhold tax at up to 30% from payments for the work (done by ‘subcontractors’). Subcontractors can register with HMRC to reduce the rate to 20% and if they have good compliance history can apply to HMRC for gross payment status to eliminate withholding altogether. CIS withholding is usually refunded sooner than ordinary income tax withholding: it is credited against the subcontractor’s next PAYE bill.
The CIS was aimed to prevent tax evasion in the construction industry. HMRC in its April consultation document diplomatically phrased it as being ‘designed to address the risk presented by a sector with large numbers of...
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The Construction Industry Scheme (CIS) requires those who pay for construction works (‘contractors’) to withhold tax at up to 30% from payments for the work (done by ‘subcontractors’). Subcontractors can register with HMRC to reduce the rate to 20% and if they have good compliance history can apply to HMRC for gross payment status to eliminate withholding altogether. CIS withholding is usually refunded sooner than ordinary income tax withholding: it is credited against the subcontractor’s next PAYE bill.
The CIS was aimed to prevent tax evasion in the construction industry. HMRC in its April consultation document diplomatically phrased it as being ‘designed to address the risk presented by a sector with large numbers of...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes: