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HMRC internal manual

Compliance Handbook

Information & Inspection Powers: Conditions and safeguards: Overlap with Construction Industry Scheme powers

The Construction Industry Scheme (CIS) regulations allow a nominated officer to require a contractor or subcontractor to produce all documents relating to construction operations for inspection. The documents are those that relate to

  • the calculation and payment of amounts paid to subcontractors
  • the calculation of the deduction to be made from those amounts on account of tax, and
  • evidence supporting the cost of materials included in the amounts paid to subcontractors.

You will find further guidance on these powers in the Construction Industry Scheme Reform manual (CISR).

These regulations remain in place from 1 April 2009. They sit alongside the information and inspection powers in FA08/SCH36 that are used to check a person’s tax position.

Checking a contractor’s obligations

If you are checking a contractor’s tax position regarding their CIS obligations and you need to use a formal power to inspect the documents listed above, you should use the FA08/SCH36 power. Under this you issue an information notice, see CH23200. The contractor can appeal against the notice and any requirement in the notice to provide information or documents that are not part of their statutory records, see CH23520.

Information from subcontractors

If you need to use a formal power to require information or inspect documents held by a subcontractor for the purpose of your check of a contractor’s obligations, you should use the powers in the CIS regulations. You can only inspect records relating to

  • the calculation or payment of amounts to the subcontractor under a construction contract in the previous three years, and
  • the direct costs of materials for those contracts.

Checking the personal tax position of a contractor or subcontractor

If you are checking the personal tax position of a contractor or subcontractor, you should use the information and inspection powers in FA08/SCH36.

SI 2005/2045/Regulation 51

SI 2005/2045/Regulation 52