Since the 5th April 2007, HM Revenue and Customs have introduced and implemented a new Construction Industry Scheme (CIS)relating to taxation.

This Scheme involves the income tax on self-employed construction contractors, and impacts the entire construction industry of contractors, subcontractors and self-employed construction workers alike.

The new CIS scheme places emphasis on automatic penalties, so, for late returns, failure to provide records or payslips or any other similar discrepancies, a penalty will automatically be sent out.

Contractors

You will need to ensure that new subcontractors are registered with HM Revenue & Customs (HMRC) and also whether you need to make gross or net payments.

CIS annual returns are no longer to be filed, however, you will have to submit a monthly return outlining all payments made to subcontractors no later than 14 days after the end of every tax month. This replaces the previous voucher system.

You will have to declare the employment status of all workers listed on your monthly return and you will need to submit nil returns in a month where you make no payments. Failure to do this could result in a penalty. Nil returns can be submitted over the telephone, internet or on paper.

Sub-Contractors

If you are a new sub-contractor or hold a temporary registration card that is due to expire on or before 6 April 2007 then you will be required to register with the HMRC, however, you will not need to re-register if you are already under the existing CIS.

CIS registration cards or certificates will no longer be required as it will now be your own responsibility to make sure that your are properly registered with the HMRC system.

If this is not done, then contractors will have to make deductions from your payments at the higher rate of 30 per cent.

Please see our useful information page for information on how to get your UTR