{"id":2431,"date":"2014-06-12T00:00:00","date_gmt":"2014-06-12T00:00:00","guid":{"rendered":"http:\/\/dev1.2facearts.com\/uncategorized\/construction-industry-and-tax\/"},"modified":"2014-06-12T00:00:00","modified_gmt":"2014-06-12T00:00:00","slug":"construction-industry-and-tax","status":"publish","type":"post","link":"https:\/\/hebblethwaites.com\/index.php\/construction-industry-and-tax\/","title":{"rendered":"Construction Industry and tax"},"content":{"rendered":"<p>\n\tAll active building contractors and building subcontractors are subject to HMRC regulation. The rules they have to abide by are set out in the Construction Industry Scheme (CIS). Essentially, contractors cannot pay their subcontractors without stopping tax. Only in specific circumstances can payments be made without deduction of tax.<\/p>\n<p>\n\tThe scheme operates a little like the PAYE system with one important difference &ndash; contractors are not required to deduct National Insurance Contributions from the payments they make to subcontractors.<\/p>\n<p>\n\tUnfortunately, your business can still be considered a contractor (and therefore subject to the CIS) even if your main business is nothing to do with construction. Under the CIS rules you are a contractor if:<\/p>\n<ul>\n<li>\n\t\tyou run a business that engages subcontractors for construction operations &#8211; a &#039;mainstream&#039; contractor<\/li>\n<li>\n\t\tyou run a business that spends an average of &pound;1 million or more a year over a three year period on construction operations &#8211; a &#039;deemed&#039; contractor<\/li>\n<\/ul>\n<p>\n\tBusinesses that are deemed to be engaged in construction include:<\/p>\n<ul>\n<li>\n\t\tbusinesses like manufacturers or retailers<\/li>\n<li>\n\t\tlocal authorities<\/li>\n<li>\n\t\tgovernment departments<\/li>\n<li>\n\t\thousing associations and &#039;arm&#039;s length&#039; management organisations (ALMOs)<\/li>\n<\/ul>\n<p>\n\tIf your business or organisation becomes a deemed contractor then it&#039;ll remain one until it can show HMRC that its spending on construction work has fallen below &pound;1 million a year for three years in a row.<\/p>\n<p>\n\tThe normal CIS rules for contractors also don&#039;t apply when:<\/p>\n<ul>\n<li>\n\t\ta deemed contractor pays for a small construction contract of less than &pound;1,000 &#8211; excluding materials costs &#8211; and has authorisation from HMRC to exempt it<\/li>\n<li>\n\t\ta contractor pays a subcontractor less than &pound;1,000 &#8211; excluding materials costs &#8211; to do construction work on the subcontractor&#039;s own property &#8211; or on any agricultural property where the subcontractor is the tenant &#8211; and has authorisation from HMRC to exempt it<\/li>\n<li>\n\t\tthe governing body or head teacher of a local education authority maintained school pays for construction work on behalf of the local education authority<\/li>\n<li>\n\t\ta charitable body or trust &#8211; but not its trading subsidiary &#8211; pays for construction work<\/li>\n<\/ul>\n<p>\n\tPrivate householders are never treated as CIS contractors, no matter how much they spend on construction operations.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>All active building contractors and building subcontractors are subject to HMRC regulation. The rules they have to abide by are set out in the Construction Industry Scheme (CIS). Essentially, contractors cannot pay their subcontractors without stopping tax. Only in specific circumstances can payments be made without deduction of tax. The scheme operates a little like [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-2431","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/2431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/comments?post=2431"}],"version-history":[{"count":0,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/posts\/2431\/revisions"}],"wp:attachment":[{"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/media?parent=2431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/categories?post=2431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hebblethwaites.com\/index.php\/wp-json\/wp\/v2\/tags?post=2431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}