{"id":19791,"date":"2022-11-03T17:01:00","date_gmt":"2022-11-03T17:01:00","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/blogs\/?p=19791"},"modified":"2022-11-03T17:01:02","modified_gmt":"2022-11-03T17:01:02","slug":"avoiding-obstacles-with-the-construction-industry-scheme","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/","title":{"rendered":"Avoiding obstacles with the Construction Industry Scheme"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2-1024x576.png\" alt=\"\" class=\"wp-image-19793\" srcset=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2-1024x576.png 1024w, https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2-300x169.png 300w, https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2-768x432.png 768w, https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2.png 1280w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Under the Construction Industry Scheme (CIS),\u00a0contractors take money from a subcontractor&#8217;s payments and send it to HM Revenue and Customs (HMRC).<\/p>\n\n\n\n<!--more-->\n\n\n\n<p>Are you up to speed with everything you need to know?<\/p>\n\n\n\n<p>Some key terms include:<\/p>\n\n\n\n<p><strong>Construction operations<\/strong><\/p>\n\n\n\n<p>These are the services the scheme relates to, such as work to permanent or temporary buildings, structures, or associated land.<\/p>\n\n\n\n<p><strong>Construction contract<\/strong><\/p>\n\n\n\n<p>This is a legal agreement, where one person provides construction services to another.<\/p>\n\n\n\n<p><strong>Contract payment<\/strong><\/p>\n\n\n\n<p>This refers to fees paid by a contractor to a subcontractor, or other party, under a construction contract.<\/p>\n\n\n\n<p>The payments can be in the form of cash, cheque, or credit. Some payments are excluded from this, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Payments made under a contract of employment under the labour \u2018agency\u2019 obligations<\/li><li>Payments obtained for the services of an individual, and where the off-payroll working rules apply.<\/li><\/ul>\n\n\n\n<p><strong>Deduction<\/strong><\/p>\n\n\n\n<p>This is the sum of tax that a contractor must pay to HMRC from a contract payment.<\/p>\n\n\n\n<p>The deduction will either be at the standard rate of 20 per cent or at the higher rate of 30 per cent.<\/p>\n\n\n\n<p><strong>The scope of the CIS<\/strong><\/p>\n\n\n\n<p>HMRC handle overseas contractors and subcontractors in the same way as their UK counterparts.<\/p>\n\n\n\n<p>If a construction project is carried out in the UK, the CIS will possibly need to be utilised.<\/p>\n\n\n\n<p><strong>Common pitfalls<\/strong><\/p>\n\n\n\n<p>Some of the most common issues faced in relation to the CIS include but are not limited to:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Not registering for and applying the CIS at the right time<\/li><li>Not recognising when the contractor threshold is surpassed<\/li><li>Failing to notice that a subcontractor is conducting construction operations<\/li><li>Not using the correct CIS tax deduction rate<\/li><li>Not considering employment status, employment mediators and \u2018IR35\u2019 requirements.<\/li><\/ul>\n\n\n\n<p><strong>What must you do?<\/strong><\/p>\n\n\n\n<p>Subcontractors with gross payment status must stay compliant in order not to lose that status, which will ultimately have a severe impact on the business.<\/p>\n\n\n\n<p>Additionally, errors by contractors can be expensive, as they can be held liable for CIS tax under deducted contract payments to subcontractors.<\/p>\n\n\n\n<p>HMRC can reclaim that CIS tax for up to six years, along with interest charges and penalties.<\/p>\n\n\n\n<p><strong>It\u2019s vital that you seek professional help and advice when dealing with matters such as the above. Contact us today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under the Construction Industry Scheme (CIS),\u00a0contractors take money from a subcontractor&#8217;s payments and send it to HM Revenue and Customs (HMRC).<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,3],"tags":[],"class_list":["post-19791","post","type-post","status-publish","format-standard","hentry","category-blog","category-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Avoiding obstacles with the Construction Industry Scheme - Moore Thompson<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Avoiding obstacles with the Construction Industry Scheme\" \/>\n<meta property=\"og:description\" content=\"Under the Construction Industry Scheme (CIS), contractors take money from a subcontractor&#039;s payments and send it to HM Revenue and Customs (HMRC).\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\" \/>\n<meta property=\"og:site_name\" content=\"Moore Thompson\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-03T17:01:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-03T17:01:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Avoiding obstacles with the Construction Industry Scheme\" \/>\n<meta name=\"twitter:description\" content=\"Under the Construction Industry Scheme (CIS), contractors take money from a subcontractor&#039;s payments and send it to HM Revenue and Customs (HMRC).\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-1.png\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/#\/schema\/person\/0d9cc808e7eb5eb75ce773e69c3d97fb\"},\"headline\":\"Avoiding obstacles with the Construction Industry Scheme\",\"datePublished\":\"2022-11-03T17:01:00+00:00\",\"dateModified\":\"2022-11-03T17:01:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\"},\"wordCount\":379,\"image\":{\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2022\/11\/M.T.-Blog-Graphic-12.10.2022-1-2-1024x576.png\",\"articleSection\":[\"Blog\",\"Tax\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\",\"url\":\"https:\/\/www.moorethompson.co.uk\/blogs\/avoiding-obstacles-with-the-construction-industry-scheme\/\",\"name\":\"Avoiding obstacles with the Construction Industry Scheme - 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