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HMRC internal manual

Oil Taxation Manual

Non-Residents Working on the UK Continental Shelf: Construction Industry Scheme - Construction Industry Scheme - Registration and gross payment

The essence of the Construction Industry Scheme is that deductions are made at one of two prescribed rates from payments made to subcontractors engaged in construction operations carried out within the United Kingdom and its territorial waters.

Subcontractors who can satisfy certain conditions under the statutory CIS compliance test are able to receive payments due to them in full. Such subcontractors are referred to as ‘Gross Payment subcontractors’.

With regard to non-resident subcontractors; it does not matter where the payment is actually made; if the construction work is carried out in the UK then the Scheme applies to that payment. Sub-contractors who are non-resident, but who are within the charge to UK tax under CTA09\S1313 & ITTOIA05\S874 are advised therefore to register for CIS. If a subcontractor does not register they will be subject to a higher rate deduction on all payments made to them.

The procedure is identical to that applying to UK resident subcontractors. See Booklet CIS340 and CISR42120 onwards.

Repayment of Tax

Applications for repayment received from non-resident subcontractors taxable under CTA09\S1313 & ITTOIA05\S874 should be dealt with in accordance with the guidance at CISR72000 of the Construction Industry Scheme Reform Manual.