252. Tax provisions applicable to contractors and sub-contractors.

252.     Tax provisions applicable to contractors and sub-contractors.

Special tax provisions apply to sub-contractors in the construction industry1, and this regime is known as the Construction Industry Scheme.

Where a contractor makes a payment to a sub-contractor under a contract, other than a contract of employment, relating to construction operations, the contractor must deduct and pay a percentage of the payment on account of tax2. If, however, the Commissioners for Her Majesty's Revenue and Customs are satisfied that the appropriate documentation has been provided, the sub-contractor will be registered for gross payment3.