KinsellaTax - Employer Compliance - PAYE Regulations - Some Special Cases - Scope of Regulations

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;

• the Finance Act 2004, Section 77(1) and (7), (Appointed Day) Order 2006;

• the Finance Act 2004, Section 61(2), (Relevant Percentage) Order 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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