1. The new Construction Industry Tax Deduction Scheme:
Development of the new scheme; Primary legislation; Secondary legislation; HMRC guidance;
2. Background to the CIS and the Tax Deduction Principle:
The background; The Tax Deduction Principle; The first Construction Industry Scheme; The second Construction Industry Scheme; The new Construction Industry Scheme;
3. To whom does this apply?
Scope of the scheme; Construction contract; Subcontractors; Contractors; "Deemed" contractors; Not contractors;
4. Exemptions:
Summary; Exemption: recipient registered for gross payment; Exemption: payments treated as earnings from employment; Exemption: deemed contractors; Exemption: charities as contractors; Exemption for small payments; Exemption for payments to the owner of land on which work is carried out; Reverese premiums; Payments made as agent for the LEA; Exemptions for public bodies: private finance arrangements;
5. Non-UK businesses operating in the UK:
Non-resident businesses generally; Non-resident companies registered as contractors or subcontractors; Non-resident individuals and partnerships registering for the CIS; Non-resident subcontractors who do not register; Obtaining National Insurance numbers and UTR's; Foreign language facilities; Repayment of CIS deductions where there is a double taxation agreement; Repayment of CIS deductions where there is no double taxation agreement;
6. How to register:
Registration as a contractor; When to register as a contractor; The registration process; Multiple schemes: election by contractors; Groups of companies; Registration as a subcontractor; Subcontractors: registration as self-employed;
7. Contractor obligations:
Registration; Employed or self-employed; Employed workers; Self-employed subcontractors; CIS payment status: verification; Deduct tax;
Keep records; Make a monthly return; Provide subcontractors with statements; Pay over the tax deducted; Due dates for payment;
8. Construction operations:
Statutory definition; Comparison with old scheme rules; Importance of definition; Guidance on terminology; Summary;
9. Employment status:
Introduction; CIS employment status declaration; It is wrong to assume HMRC has accepted self-employment; An existing self-employment does not automatically transfer; Subcontractors under greatest scrutiny and risk; How to determine the employment status of workers;
Case law guidance; The "irreducible minimum"; Other key factors of employment or self-employment; The intention of the parties; Contracts; Still not sure? Summary;
10. Verifying new subcontractors:
Overview; Legal background; Repeated engagements; Change of status by subcontractors; Practicalities: early days of the new scheme; Practicalities: form CIS333; Practicalities: new subcontractors; Responses to verification applications;
11. Paying subcontractors:
Employment status; Verification; Making payments: subcontractors registered for gross payment; Making payments: subcontractors registered for net payment; Payment advice; Making payments: subcontractors who are not registered under the scheme; Making a payment to a third party; Other reductions in the payment made; Public bodies as subcontractors;
12. Monthly returns:
Legislation; Returns process; Contractor details; Subcontractor and payment details; Subcontractor paid gross; Subcontractors paid net of standard rate deduction; Subcontractors paid net of higher rate deduction; Dcelarations; Practicalities: paper returns; Practicalities: online returns; Due date for returns; Information for subcontractors; Electronic submission of monthly returns; Penalties;
Contractors becoming inactive; Correcting errors on returns; Summary;
13. Record keeping and enforcement:
Introduction; Specific obligations; Subcontractor records; Companies: additional requirements; Form of records; Evidence: employment status;
Contracts for construction operations; Verification details; Advice of payment; Payments of CIS tax; Company set off; Change of control of close company; Failure to pay amounts due; Recovery proceedings;
Interest on overdue payments;
14. Registration for gross payment:
Legislation; Conditions applying to all subcontractors; Companies: alternative test; The business test; The turnover test; Evidence of turnover; New businesses: the turnover test; Turnover test treated as satisfied; The compliance test; Refusal: appeals;
15. Meeting the compliance test:
Relevance of the compliance test; Qualifying period; The compliance conditions: individual applicants; The compliance conditions: application by a partnership; The compliance conditions: application by a company; Failure to meet the compliance conditions; Claim that certain compliance conditions do not apply; VAT obligations;
16. Loss of gross payment status:
Introduction; Legislation; Rights of appeal against determination;
Consequences of issue of a determination; Re-aquiring registration for gross payment; Practical implications; Failure to meet the turnover condition; Failure to meet the compliance conditions; Reasonable excuse for failure; Remedial action by the advisor: loss of gross payment status;
17. Payment under deduction:
Registration for payment under deduction; Legislation; Refusal; Cancellation of registration for payment under deduction; Registration for payment under deduction: subcontractors removed from registration for gross payment; Receipt of payment under deduction; Specimen advice of payment; Treatment of tax suffered: income tax;
In-year payments;
18. Company set off of amounts deducted:
Treatment of CIS tax suffered generally; Treatment in the hands of an individual; Treatment in a limited company; Order of set off; Statutory provisions; Treatment of excess;
19. Employer issues:
PAYE and NIC; Companies: set off of amounts suffered under the CIS;
Employers liable to make electronic payments of PAYE; Impact of late payments on subcontractor status; Breaches which do not cause loss of gross payment status; Travel and subsistence expenses paid to employees; Payments under working rule agreements; Provision of a van for employees; Payments for use of a privately owned van or car: approved mileage allowance payments; Provision of lunch and other refreshments on site;
20. HMRC inspections and what to do:
Background; Code of Practice 3; Notice of the inspection visit; Where the inspection takes place; Professional representation; The personnel involved; How long will the inspection take? The opening interview; Reviewing the relevant business records; After the inspectors have gone; Agreeing any liabilities; Recovery of liabilities from subcontractors; Negotiating a settlement; Agreement of the offer; Post-review action;
21. Construction industry checklist:
Introduction; Pre-new CIS start date; Annual CIS checks; Appendix 1 SI 2005/2045; Appendix 2 Construction operations (CIS340: Appendices A-C); CIS340: Appendix A; CIS340: Appendix B; CIS340: Appendix C; Appendix 3 HMRC guidance; Factsheets; New CIS FAQs; CIS online: FAQs;
Additional technical guidance and advice; Regulation 22; Construction Industry Scheme online: software and online forms; Appendix 4 HMRC contact details; Appendix 5 New CIS forms; CIS300: Contractor's monthly return; CIS300: Contractor's monthly return guidance notes;
CIS340: Appendix E; Appendix 6 Employment status indicator tool: an illustration - What it does, Why use it? Case study; Appendix 7 Case headnotes - Express and Echo Publications Ltd v Tanton, Hall (Inspector of Taxes) v Lorimer, Lewis, t/a MAL Scaffolding and others v Revenue and Customs Commissioners, Market Investigations v Minister of Social Security, Massey v Crown Life Insurance Co, O'Kelly and others v Trusthouse Forte plc, Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance; Appendix 8 Government proposals for the taxation of managed service companies - Background -
What are managed service companies (MSCs)? The problem, Proposed solution, Definitions, Tax treatment, Liability for tax due, Wider impact; Table of cases; Table of statutes; Table of statutory instruments; Index
