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Changes to the Construction Industry Scheme

Note: This is our original regulation update text, published on 26 February 2007. Unlike the rest of our site, this archived material is not updated if the law changes.

Relevant to
Contractors, subcontractors, self-employed construction workers, and others in the construction industry in the United Kingdom

Took effect on
6 April 2007

From 6 April 2007, the new Construction Industry Scheme (CIS) will apply.

Contractors

  • You will have to check that new subcontractors are registered with HM Revenue & Customs (HMRC). You must also check with HMRC whether you need to make gross or net payments to each. 
  • You will no longer have to file CIS annual returns.
  • You will have to submit a monthly return detailing all payments made to subcontractors no later than 14 days after the end of every tax month. This will replace the previous voucher system. 
  • On your monthly return, you will also have to declare the employment status of all workers that you've listed.
  • You must submit nil returns in a month where you make no payments, or you could face a penalty. You will be able to submit nil returns over the telephone, via the internet or on paper.

Subcontractors

  • If you are already registered under the existing CIS, you will not have to re-register. 
  • You will be required to register with HMRC if you are a new subcontractor - or hold a temporary registration card that is due to expire on or before 6 April 2007.
  • You will no longer be required to have CIS registration cards or certificates. 
  • It is your responsibility to make sure that you are properly registered on the HMRC system. If not, contractors will have to make deductions from your payments at the higher rate of 30 per cent.

Full title of regulation
The Income Tax (Construction Industry Scheme) Regulations 2005

From
HM Revenue & Customs

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