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Construction industry scheme: What is tax-deductible?

Shared from Tax Insider: Construction industry scheme: What is tax-deductible?
By Tim Palmer, December 2023

Tim Palmer outlines the construction industry scheme tax obligations placed on a contractor to withhold the correct amount of tax when paying a net registered subcontractor. 

Contractors in the construction industry have big regular construction industry scheme (CIS) tax obligations and responsibilities. A contractor will have to get relevant financial and fiscal details regarding the subcontractor they plan to use to carry out construction work. The contractor will then have to ‘verify’ them. This means going online, submitting the appropriate details to HMRC, and waiting for a decision from HMRC as to how to pay them.  

HMRC will instruct the contractor to pay the subcontractor in one of three ways: 

  • gross; 

  • net of 20% CIS tax deducted if the subcontractor is ‘registered net’ with HMRC; or 

  • deduct 30% CIS tax if the

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