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Construction Industry Scheme (CIS)

Construction Industry Scheme (CIS)

The Construction Industry Scheme (CIS) represents a difficult administrative burden for businesses involved in construction.

Contractors commonly recognise that their transactions come within the scope of CIS, however navigating the complex rules can be challenging and punitive penalties can be imposed where certain issues have been overlooked.

Errors commonly occur in the following areas:

  • Deciding whether the nature of the work brings it within the scope of CIS.
  • Deducting tax at the right rate.
  • Own construction work.
  • Payments of expenses.

We have assisted many businesses in dealing with the fallout from an HMRC CIS visit and protecting them from extreme tax payments and penalties charged for honest mistakes.

If you are unsure if your business is implementing CIS and would like an expert opinion, we are also happy to carry out ‘cold reviews’ to ensure that your compliance obligations are met.

If you have had an inspection and HMRC want to charge penalties, we can definitely help.

CIS Construction Industry Scheme Review by HMRC

We assisted a Contractor, who fitted cabling into shops, with a review from HMRC.

The Problem

HMRC found that they had deducted tax at the wrong rate in some occasions and had never deducted tax on payments made to subcontractors for travelling. They calculated the tax bill emanating from these errors to be £70,000 plus penalties.

The Solution

We reviewed the situation and felt that the Contractor had taken reasonable care in dealing with their CIS responsibilities as they had employed an experienced individual to handle it for them. These mistakes had been made by this individual.

The Result

Whilst the case could have been taken to Tribunal on the basis that no liabilities were due, the client expressed a wish to settle matters quickly and so we negotiated with HMRC for a payment of £25,000 to be made – a saving of over £45,000 from the original assessment.

Contact us today to discuss your tax requirements.
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