Construction Industry Scheme

[BruceB]

I doubt the legislation has been updated, probably just their interpretation of it, which of course is not the law. Did they give you a document reference?

I am still waiting for a reply to the letter I sent to HMRC a few weeks ago.

Regards
Bruce

 

[RJ01]

No she didn't give any reference to it, I think I might delve further in yet and write a letter, let us know when you get a reply i'm very interested in there response.

 

[BruceB]

Got the reply this morning from HMRC. Here is the question as asked



and here is the answer



I am not inclined to fight them on it, so I guess that means that I must register.

Regards
Bruce

 

[RJ01]

Thanks for sharing that.

 

[Worcester]

@BruceB

I've just used HM Revenue & Customs: Are you a contractor or subcontractor under CIS? to find out how this would affect us as my accountant said that the way that we engage people meant it didn't apply, and having run a couple of scenarious through the above ESI tool, they came out as 'employees' not 'subcontractors' - this ties up with our employee insurance liability also, efectively confirming that we are not subcontracting any work ..

I'll get back to him (our accountant) and double check with him, however the way WE work (and it could be different for you) the implication is that until we become a 'deemed contractor' we could well be exempt - depending upon whether it is the total works value or just what we pay our 'employees' (as defined here)

When are you a contractor under CIS? Under the rules of CIS, you're a contractor if:

• you run a business that engages subcontractors for construction operations - a 'mainstream' contractor
• you run a business that spends an average of £1 million or more a year over a three year period on construction operations - a 'deemed' contractor

 

[BruceB]

I engage a scaffolding company to put up and take down scaffolding. As I read it, because they use their labour, they are subcontractors and I am a main contractor.

 

[Worcester]

Probably in that case. We work differently, however I've been in construction for 30 years!

 

[Deleted member 26818]

I engage a scaffolding company to put up and take down scaffolding. As I read it, because they use their labour, they are subcontractors and I am a main contractor.

Would not the same apply to skip hire?

 

[BruceB]

Would not the same apply to skip hire?

Different I judge, because there is no labour element involved.
CISR14260 - The Scheme: construction operations: plant hire
But I am clearly no expert

 

[Deleted member 26818]

Perhaps not a good example.
My point is that if you hire an item, such as scaffolding, a skip, a JCB etc. You are only hiring that item, not the labour involved in delivering or maintaining the item.
If you were, as happens on larger construction projects, to contract the scaffolders to be on site for alterations during the term of the construction period, then yes you would be subcontracting the labour.

 

[albsmith]

The Construction Industry Scheme, which is frequently abbreviated to CIS is a scheme implemented by the government to prevent tradesmen such as carpenters and plumbers employed by contractors to exploit loopholes in the law and ultimately end up avoid tax. In some situations tradesmen have been paid cash in hand by contractors allowing them to avoid tax payments, the construction industry scheme was implemented to prevent this.
Contractors that have an expenditure over a certain level are required to comply to the construction industry scheme, which dictates that must ascertain the tax status of all their employees. The construction industry scheme is not a particularly popular initiative with people involved in contractual work as it causes a great deal of additional paperwork for them. Contractors who are affected by the Construction Industry Scheme are required by the Inland Revenue office to submit a monthly report detailing any tax payments they have made for their workers and any deductions that have been made.
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