The construction industry scheme in practice
The construction industry scheme in practice

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • The construction industry scheme in practice
  • Construction contract
  • Agreements for lease with development obligations
  • Acquisitions of a company
  • Acquisition of a business
  • Non-compliance

In practice, a tax lawyer is likely to come across the construction industry scheme (CIS) rules when representing:

  1. a party to:

    1. a construction contract

    2. a sale of a company or business, or

    3. an agreement for lease with development obligations, or

  2. a person failing to comply with its obligations under the CIS rules (or at least accused of such failure)

Listed below are some of the key issues to consider in these circumstances.

For more information on the CIS rules, see Practice Notes:

  1. Construction industry scheme—overview

  2. The construction industry scheme—when does it apply?

  3. Construction industry scheme—contractors' obligations

  4. Construction industry scheme—sub-contractors' obligations

  5. Loss of CIS gross payment status—practical considerations for sub-contractors, and

  6. Construction industry scheme penalties

Construction contract

When a tax lawyer is acting for a party to a construction contract, the key points are:

  1. that the CIS rules apply in respect of some agreements that are less obviously construction contracts—for an example, see agreements for lease below

  2. to establish whether the client is a contractor, a sub-contractor or both since this determines which obligations apply (this is more difficult in circumstances where a party is acting in both capacities)—for an example, see agreements for lease below

  3. that multiple parties can be sub-contractors to a construction contract, ie different sub-contractors may be responsible for providing different construction se