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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