Q&As

Does a construction company that provides subcontractors with a van (including all fuel and running costs) for use on their construction projects have any CIS obligations in relation to the provision of the van?

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Published on LexisPSL on 31/10/2016

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Does a construction company that provides subcontractors with a van (including all fuel and running costs) for use on their construction projects have any CIS obligations in relation to the provision of the van?
  • Scope of CIS

The construction industry scheme (CIS) was devised to limit the amount of tax lost as a result of subcontractors in the construction industry under-declaring or failing to notify their chargeability to UK tax. For further information, see Practice Note: The construction industry scheme—when does it apply?

Scope of CIS

The obligation to deduct tax imposed by the CIS rules applies only to a contract payment.

A ‘contract payment' is defined as:

‘… any payment which is made under a construction contract and is so made by the contractor (see section 57(3)) to—

(a) the sub-contractor,

(b) a person nominated by the sub-contractor or the contractor, or

(c) a person nominated by a person who is a sub-contract

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