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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
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The Scheme: primary legislation: section 61

This section covers the deductions to be made from contract payments.

  • after making allowances for the direct cost of materials, contractors must deduct the relevant percentage from all contract payments made: FA04/S61 (1)
  • the ‘relevant percentage’ will be an amount to be determined by the Treasury: FA04/S61 (2)
  • the limits governing the relevant percentage for registered and unregistered persons are the basic and higher rates of income tax respectively: FA04/S61 (3)