Construction industry scheme CIS - Revision history

Editor at 16:49, 21 January 2025

2025-01-21T16:49:03Z

← Older revision		Revision as of 16:49, 21 January 2025
Line 49:		Line 49:
	= Reform =		= Reform =

−	In Beech Developments (Manchester) Ltd & Ors v HMRC [2024] EWCA Civ 486, the Court of Appeal allowed the taxpayers' appeals and confirmed that HMRC does have the power to issue 'non-liability directions' under the Construction Industry Scheme (CIS).	+	In 2024 the case of Beech Developments (Manchester) Ltd & Ors v HMRC [2024] EWCA Civ 486, the Court of Appeal allowed the taxpayers' appeals and confirmed that HMRC does have the power to issue 'non-liability directions' under the Construction Industry Scheme (CIS). This meant that a contractor if faced with a regulation 13 determination must act quickly and appeal to the determination and apply for a regulation 9 direction. Once the regulation 13 determination is finalised, a regulation 9 direction will not have any effect. Following the case a number of 'beech' ammendments were made covering compliance to Regulation 9(5) directions including: direction under ‘Condition B’ at Regulation 9(4), co-ordination with Regulation 13(2) determinations, developments after refusals, directions under ‘Condition A’ at Regulation 9(3), and to regulation 13. In 2025 CIS Business helpdesk information was further claried.
		+
		+	In 2021 legislative changes were applied including a turnover test and penalties for false figures and application of the statutory test for ‘deemed’ contractor” status and how such a status ends, aswell as expenditure by certain businesses on their own property or 'own-build'. In 2022 a number of minor ammendments were made to the maniual and scheme.

	In November 2020, the government published a draft finance bill which included proposed changes to the CIS to tackle abuse ensuring HMRC can act quickly where the rules are being broken. A clarification to the cost of materials provision will remove scope for different interpretations of the existing rule, and deemed contractor changes are designed to prevent manipulation of the current rules so that a business can avoid operating the CIS.. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]		In November 2020, the government published a draft finance bill which included proposed changes to the CIS to tackle abuse ensuring HMRC can act quickly where the rules are being broken. A clarification to the cost of materials provision will remove scope for different interpretations of the existing rule, and deemed contractor changes are designed to prevent manipulation of the current rules so that a business can avoid operating the CIS.. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]

	The government announced at Spring Budget 2020 a consultation on measures to tackle abuse of the CIS. A consultation document was published 19 March 2020 setting out proposals to tackle this abuse. Due to coronavirus the consultation was extended until 28 August 2020.		The government announced at Spring Budget 2020 a consultation on measures to tackle abuse of the CIS. A consultation document was published 19 March 2020 setting out proposals to tackle this abuse. Due to coronavirus the consultation was extended until 28 August 2020.
		+
		+	From 2018 to 2020 various changes were made to the scheme and ammendments to the manual including sections covering construction operations in particular reverse premiums with examples of what does and does not constitute a reverse premium for CIS purposes.

	On 16 April 2016 [https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform The Construction Industry Scheme Reform Manual] was initially published it described the new Construction Industry Scheme (CIS) post April 2007, showing how payments would be taxed from 6 April 2007.		On 16 April 2016 [https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform The Construction Industry Scheme Reform Manual] was initially published it described the new Construction Industry Scheme (CIS) post April 2007, showing how payments would be taxed from 6 April 2007.
Line 63:		Line 67:
	This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)		This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* CIS contractors and CIS sub-contractors.		* CIS contractors and CIS sub-contractors.
Line 87:		Line 91:
	* Payroll Heaven: [https://payrollheaven.com/cis-returns-service/ CIS Returns Service]		* Payroll Heaven: [https://payrollheaven.com/cis-returns-service/ CIS Returns Service]

−	~~[[Category:Articles_needing_more_work]]~~ [[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 16:30, 21 January 2025

2025-01-21T16:30:29Z

← Older revision		Revision as of 16:30, 21 January 2025
Line 27:		Line 27:
	* cleaning the inside of buildings after construction work		* cleaning the inside of buildings after construction work

−	~~Exceptions~~	+	= CIS exceptions =

	For certain jobs registration is not required, including:		For certain jobs registration is not required, including:

Editor at 16:24, 21 January 2025

2025-01-21T16:24:45Z

← Older revision		Revision as of 16:24, 21 January 2025
Line 38:		Line 38:
	* work on construction sites that’s clearly not construction - for example, running a canteen or site facilities		* work on construction sites that’s clearly not construction - for example, running a canteen or site facilities

−	~~Contractors then have certain~~ obligations~~, including;~~	+	= Contractor obligations under CIS =

−	* ~~Checking~~ with HMRC that ~~sub-contractors~~ are registered ~~under the Construction Industry Scheme (this can be done on the HMRC website);~~	+	* A contractor must register for CIS before taking on a first subcontractor.
−	* ~~Paying sub-contractors in accordance with procedures laid down by HMRC once the sub-~~contractor ~~has been verified. These include procedures for making~~ deductions and ~~for issuing payment and deduction statements,~~ and	+	* A contractor must check if a person should be employed instead of subcontracting the work, if they should be an employee a penalty may be deducted.
−	* ~~Submitting~~ monthly ~~CIS~~ returns to HMRC ~~giving details of payments made~~ to ~~sub-contractors under the scheme~~.	+	* A contractor should check with HM Revenue and Customs (HMRC) that subcontractors are registered with CIS.
		+	* When a contractor pays a subcontractor, they usually need to make deductions from the payments and pay the money to HMRC. Deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.
		+	* A contractor needs to file monthly returns and keep full CIS records, a penalty may be liable if this is not done.
		+	* A contractor must let HMRC know about any changes to their business.

	= Reform =		= Reform =

Editor at 16:20, 21 January 2025

2025-01-21T16:20:00Z

← Older revision		Revision as of 16:20, 21 January 2025
Line 1:		Line 1:
		+	= Brief description and background =
		+
	[https://www.gov.uk/what-is-the-construction-industry-scheme The Construction Industry Scheme (CIS)] sets out a series of rules for how contractors should make payments to sub-contractors.		[https://www.gov.uk/what-is-the-construction-industry-scheme The Construction Industry Scheme (CIS)] sets out a series of rules for how contractors should make payments to sub-contractors.

−	The scheme was introduced in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.	+	The scheme was introduced in April 1997, by the Inland Revenue in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.

−	The definition of 'contractor' for the purposes of the scheme includes not just organisations traditionally considered to be contractors, but any organisation ~~that spends~~ more than ~~an average of £1~~ million ~~a year~~ on construction ~~operations over a three-year period~~ (for example local authorities).	+	The definition of 'contractor' for the purposes of the scheme includes not just organisations traditionally considered to be contractors who pay subcontractors for construction work, but any organisation who has spent more than £3 million on construction in the 12 months since making the first payment (for example local authorities).

	Qualifying contractors are required to register under the Construction Industry Scheme with HM Revenue & Customs (HMRC) and to inform them of changes to their business.		Qualifying contractors are required to register under the Construction Industry Scheme with HM Revenue & Customs (HMRC) and to inform them of changes to their business.

−	Sub-contractors ~~do not have to~~ register for CIS, ~~but~~ if they do not register, they will suffer higher-rate deductions taken from their payments.	+	Sub-contractors should register for CIS, if they do construction work for a contractor, if they do not register, they will suffer higher-rate deductions taken from their payments. If an organisation ior individual falls under both categories they must register as both.
		+
		+	= Work covered by CIS =
		+
		+	CIS covers most construction work to:
		+
		+	* a permanent or temporary building or structure
		+	* civil engineering work like roads and bridges
		+
		+	For the purpose of CIS, construction work includes:
		+
		+	* preparing the site - for example, laying foundations and providing access works
		+	* demolition and dismantling
		+	* building work
		+	* alterations, repairs and decorating
		+	* installing systems for heating, lighting, power, water and ventilation
		+	* cleaning the inside of buildings after construction work
		+
		+	Exceptions
		+
		+	For certain jobs registration is not required, including:
		+
		+	* architecture and surveying
		+	* scaffolding hire (with no labour)
		+	* carpet fitting
		+	* making materials used in construction including plant and machinery
		+	* delivering materials
		+	* work on construction sites that’s clearly not construction - for example, running a canteen or site facilities

	Contractors then have certain obligations, including;		Contractors then have certain obligations, including;

Editor at 16:04, 21 January 2025

2025-01-21T16:04:05Z

← Older revision		Revision as of 16:04, 21 January 2025
Line 17:		Line 17:
	= Reform =		= Reform =

−	In ~~June 2014~~, the ~~government launched a [https://www.gov.uk/government/consultations/improving-the-operation-~~of~~-the-construction-industry-scheme-cis consultation] into ways to improve the CIS by reducing the administrative burden it imposes. Some people within~~ the ~~industry~~ have ~~called for~~ the ~~scheme~~ to ~~be scrapped. Ref.~~ Construction ~~Enquirer [http://www.constructionenquirer.com/2014/07/11/calls-grow-to-scrap-cis-tax-scheme/ Calls grow to scrap~~ CIS ~~tax scheme] 11 July 2014. This consultation closed on 22 September 2014~~.	+	In Beech Developments (Manchester) Ltd & Ors v HMRC [2024] EWCA Civ 486, the Court of Appeal allowed the taxpayers' appeals and confirmed that HMRC does have the power to issue 'non-liability directions' under the Construction Industry Scheme (CIS).

−	In November ~~2014~~, the ~~Autumn Statement 2014 proposed~~ a ~~package of improvements~~ to the ~~Construction Industry Scheme~~ to ~~reduce~~ the ~~administrative burden on~~ construction ~~businesses~~.	+	In November 2020, the government published a draft finance bill which included proposed changes to the CIS to tackle abuse ensuring HMRC can act quickly where the rules are being broken. A clarification to the cost of materials provision will remove scope for different interpretations of the existing rule, and deemed contractor changes are designed to prevent manipulation of the current rules so that a business can avoid operating the CIS.. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]

	The government announced at Spring Budget 2020 a consultation on measures to tackle abuse of the CIS. A consultation document was published 19 March 2020 setting out proposals to tackle this abuse. Due to coronavirus the consultation was extended until 28 August 2020.		The government announced at Spring Budget 2020 a consultation on measures to tackle abuse of the CIS. A consultation document was published 19 March 2020 setting out proposals to tackle this abuse. Due to coronavirus the consultation was extended until 28 August 2020.

−	In November ~~2020~~, the ~~government published a draft finance bill which included~~ proposed ~~changes~~ to the ~~CIS~~ to ~~tackle abuse ensuring HMRC can act quickly where~~ the ~~rules are being broken~~. ~~A clarification to the cost of materials provision will remove scope for different interpretations of the existing rule~~, ~~and deemed contractor changes are designed to prevent manipulation of~~ the ~~current rules so that~~ a ~~business can avoid operating the CIS.. Ref~~ [https://www.gov.uk/government/~~publications~~/~~changes~~-to-~~tackle~~-construction-industry-scheme-~~abuse https~~://www.~~gov~~.uk/~~government~~/~~publications~~/~~changes~~-to-~~tackle~~-~~construction~~-~~industry~~-scheme~~-abuse~~]	+	On 16 April 2016 [https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform The Construction Industry Scheme Reform Manual] was initially published it described the new Construction Industry Scheme (CIS) post April 2007, showing how payments would be taxed from 6 April 2007.
		+
		+	In November 2014, the Autumn Statement 2014 proposed a package of improvements to the Construction Industry Scheme to reduce the administrative burden on construction businesses.
		+
		+	In June 2014, the government launched a [https://www.gov.uk/government/consultations/improving-the-operation-of-the-construction-industry-scheme-cis consultation] into ways to improve the CIS by reducing the administrative burden it imposes. Some people within the industry have called for the scheme to be scrapped. Ref. Construction Enquirer [http://www.constructionenquirer.com/2014/07/11/calls-grow-to-scrap-cis-tax-scheme/ Calls grow to scrap CIS tax scheme] 11 July 2014. This consultation closed on 22 September 2014.

	This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)		This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)
Line 51:		Line 55:
	* Payroll Heaven: [https://payrollheaven.com/cis-returns-service/ CIS Returns Service]		* Payroll Heaven: [https://payrollheaven.com/cis-returns-service/ CIS Returns Service]

−	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:Articles_needing_more_work]] [[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

86.136.250.193 at 12:01, 21 December 2021

2021-12-21T12:01:11Z

← Older revision		Revision as of 12:01, 21 December 2021
Line 49:		Line 49:
	* HMRC: [http://www.hmrc.gov.uk/cis/index.htm Construction Industry Scheme].		* HMRC: [http://www.hmrc.gov.uk/cis/index.htm Construction Industry Scheme].
	* Cantor Atkin: [http://www.cantoratkin.co.uk CIS Scheme assistance].		* Cantor Atkin: [http://www.cantoratkin.co.uk CIS Scheme assistance].
		+	* Payroll Heaven: [https://payrollheaven.com/cis-returns-service/ CIS Returns Service]

	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]		[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]] [[Category:Taxation]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 17:03, 25 February 2021

2021-02-25T17:03:35Z

← Older revision		Revision as of 17:03, 25 February 2021
Line 31:		Line 31:
	* CIS contractors and CIS sub-contractors.		* CIS contractors and CIS sub-contractors.
	* Contractor.		* Contractor.
		+	* Construction Industry Scheme or IR35?
	* Earned value.		* Earned value.
	* Housing Grants Construction and Regeneration Act.		* Housing Grants Construction and Regeneration Act.

Designing Buildings at 09:13, 17 November 2020

2020-11-17T09:13:51Z

← Older revision		Revision as of 09:13, 17 November 2020
Line 1:		Line 1:
−	he Construction Industry Scheme (CIS) sets out a series of rules for how contractors should make payments to sub-contractors.	+	[https://www.gov.uk/what-is-the-construction-industry-scheme The Construction Industry Scheme (CIS)] sets out a series of rules for how contractors should make payments to sub-contractors.

	The scheme was introduced in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.		The scheme was introduced in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.

Designing Buildings at 09:12, 17 November 2020

2020-11-17T09:12:27Z

← Older revision		Revision as of 09:12, 17 November 2020
Line 1:		Line 1:
−	{\|	+	he Construction Industry Scheme (CIS) sets out a series of rules for how contractors should make payments to sub-contractors.
−	~~\| [[File:Calculator_posterised.jpg\|link=File:Calculator_posterised.jpg]]~~	+
−	\|}	+
−		+
−	~~The~~ Construction Industry Scheme (CIS) sets out a series of rules for how contractors should make payments to sub-contractors.	+

	The scheme was introduced in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.		The scheme was introduced in order to try and prevent the loss of revenue to the Exchequer arising from payments between contractors not being properly accounted for for tax purposes. For all contractors and sub-contractors who fall within scope, the obligation to account properly for tax and to apply deductions from payments made is clear and severe penalties automatically arise if the provisions of the scheme are not followed rigorously.
Line 25:		Line 21:
	In November 2014, the Autumn Statement 2014 proposed a package of improvements to the Construction Industry Scheme to reduce the administrative burden on construction businesses.		In November 2014, the Autumn Statement 2014 proposed a package of improvements to the Construction Industry Scheme to reduce the administrative burden on construction businesses.

−	In November 2020, the government published a draft finance bill ~~for consultation. This~~ included proposed changes to the CIS to tackle abuse. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]	+	The government announced at Spring Budget 2020 a consultation on measures to tackle abuse of the CIS. A consultation document was published 19 March 2020 setting out proposals to tackle this abuse. Due to coronavirus the consultation was extended until 28 August 2020.
		+
		+	In November 2020, the government published a draft finance bill which included proposed changes to the CIS to tackle abuse ensuring HMRC can act quickly where the rules are being broken. A clarification to the cost of materials provision will remove scope for different interpretations of the existing rule, and deemed contractor changes are designed to prevent manipulation of the current rules so that a business can avoid operating the CIS.. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]

	This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)		This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)

Designing Buildings at 09:09, 17 November 2020

2020-11-17T09:09:34Z

← Older revision		Revision as of 09:09, 17 November 2020
Line 19:		Line 19:
	* Submitting monthly CIS returns to HMRC giving details of payments made to sub-contractors under the scheme.		* Submitting monthly CIS returns to HMRC giving details of payments made to sub-contractors under the scheme.

−	~~NB:~~ In June 2014, the government launched a [https://www.gov.uk/government/consultations/improving-the-operation-of-the-construction-industry-scheme-cis consultation] into ways to improve the CIS by reducing the administrative burden it imposes. Some people within the industry have called for the scheme to be scrapped. Ref. Construction Enquirer [http://www.constructionenquirer.com/2014/07/11/calls-grow-to-scrap-cis-tax-scheme/ Calls grow to scrap CIS tax scheme] 11 July 2014. This consultation closed on 22 September 2014.	+	= Reform =
		+
		+	In June 2014, the government launched a [https://www.gov.uk/government/consultations/improving-the-operation-of-the-construction-industry-scheme-cis consultation] into ways to improve the CIS by reducing the administrative burden it imposes. Some people within the industry have called for the scheme to be scrapped. Ref. Construction Enquirer [http://www.constructionenquirer.com/2014/07/11/calls-grow-to-scrap-cis-tax-scheme/ Calls grow to scrap CIS tax scheme] 11 July 2014. This consultation closed on 22 September 2014.

	In November 2014, the Autumn Statement 2014 proposed a package of improvements to the Construction Industry Scheme to reduce the administrative burden on construction businesses.		In November 2014, the Autumn Statement 2014 proposed a package of improvements to the Construction Industry Scheme to reduce the administrative burden on construction businesses.

−	~~= About this article =~~	+	In November 2020, the government published a draft finance bill for consultation. This included proposed changes to the CIS to tackle abuse. Ref [https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse https://www.gov.uk/government/publications/changes-to-tackle-construction-industry-scheme-abuse]

−	This article was created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)	+	This article was originally created by:--[[User:Martinc\|Martinc]] 17:59, 19 June 2013 (BST)

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =