Scope of Regulations


The regulations governing deductions from payments to subcontractors in the construction industry are contained in:-


    • primary legislation, FA 2004, s. 57–77 and Sch. 11–12;


    • the Income Tax (Construction Industry Scheme) Regulations 2005;


    • the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2007;







These regulations, which govern the collection and recovery of amounts deducted and various administrative matters, provide for:-


    • the requirement that the contractor verifies the subcontractor’s registration status;


    • the records to be kept of individual payments made to subcontractors and of the amount deducted;


    • the requirement that the contractor provides the subcontractor with a statement of tax deducted;


    • the payment of amounts deducted to the collector of taxes;


    • the recovery of amounts deducted;


    • the determination of amounts payable by the contractor;


    • the monthly returns to be made by the contractor;


    • the inspection of the records of contractors and subcontractors;


    • the amounts deducted to be set off against the subcontractor’s liabilities; and


    • the procedures to be followed when payment is made to a subcontractor with or without deduction of tax.



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