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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): scheme overview: CIS - from 6 April 2007 - overview

COG909320 gave a background to CIS (Reform) which was introduced on 6 April 2007.

The scheme is aimed at preventing evasion of tax by subcontractors working in the Construction Industry. It achieves this by placing an obligation on contractors to make deductions on account of tax from payments made to subcontractors, unless HMRC has advised them that the payment can be made without deduction (gross).

More information on deduction rates can be found at COG910080.

The scheme also obliges a contractor to make a monthly return of payments made and amounts deducted from payments. The return includes declarations regarding the verification of subcontractors (COG910040), and the employment status of subcontractors (COG909165).

More information on the monthly return is at COG910150.

Further information on the Scheme can be found in