Construction Industry Scheme
If you run a business in the construction sector, or operate as a sole trader in the building and construction industry, then you’ll be well aware of the Construction Industry Scheme (CIS).
CIS is designed to ensure a fair deal for subcontractors who work in construction, and to ensure that businesses in the sector meet certain legislative requirements. One effect of this is to place greater burdens upon businesses operating in this sector, creating extra administrative duties that can burn those essential resources of time and money
CIS means that when subcontractors are paid, the contractor must withhold some of the pay and send it to HMRC – the subcontractor can then offset this withheld payment against their tax bill.
The Construction Industry Scheme applies to both contractors and subcontractors in the construction industry.