Acister

The Construction Industry Scheme, which is frequently abbreviated to CIS is a scheme implemented by the government to prevent tradesmen such as carpenters and plumbers employed by contractors to exploit loopholes in the law and ultimately end up avoid tax. In some situations tradesmen have been paid cash in hand by contractors allowing them to avoid tax payments, the construction industry scheme was implemented to prevent this.

Contractors that have an expenditure over a certain level are required to comply to the construction industry scheme, which dictates that must ascertain the tax status of all their employees. The construction industry scheme is not a particularly popular initiative with people involved in contractual work as it causes a great deal of additional paperwork for them. Contractors who are affected by the Construction Industry Scheme are required by the Inland Revenue office to submit a monthly report detailing any tax payments they have made for their workers and any deductions that have been made.

Although it is time consuming and a great deal of additional work for contractors it is vital that companies that are required to comply to the Construction Industry Scheme do so, otherwise they may be subjected to very harsh penalties and even prosecution.

Under the construction industry scheme it is the duty of contractor firms to keep their employees and subcontractors informed about their tax payments and status and for many contractors this has required them to initiate new payment schemes.

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