Income Tax (Construction Industry Scheme) Regulations 2005, Regulation 4
What this means for your business
- Enforced by
- HMRC
- Applies to
- United Kingdom
- On this page
- 7 compliance obligations
What you must do
7 compliance obligations under this legislation.
Notifications 1
Notify HMRC of new share control within 30 days
If your limited company (a close company) issues new shares or sells shares and the new holder was not a shareholder before, you must tell HMRC about it within 30 days. This keeps the tax scheme updated on who controls your company. It only applies to companies that are part of the Construction Industry Scheme’s gross‑payment registration.
Payments and fees 2
Deduct and remit CIS payments to HMRC correctly
If you pay a company subcontractor, you must deduct the required CIS amount from that payment and send it straight to HMRC. HMRC will then use the money to cover the subcontractor’s National Insurance, PAYE and other liabilities. If you have deducted more than necessary you will get a refund after the tax year ends, but only after the subcontractor has filed the required return and the tax year has closed.
Pay the default surcharge to HMRC within 30 days
If HMRC sends you a default notice and a surcharge notice for a payment you owe under the Construction Industry Scheme, you must pay the surcharge. The amount is based on how many defaults you’ve had in the period and must be paid within 30 days of the notice.
Record keeping 2
Keep CIS records and let HMRC inspect them
If the contractor who pays you under the Construction Industry Scheme withholds sums that HMRC treats as payments toward your tax liability, you must keep detailed records of what you would have owed if the money hadn’t been withheld and the amounts that were deducted. HMRC can ask to see those records at a time and place agreed with them, and you must hand them over or let the HMRC person take copies. So, when your contractor does CIS withholding that is treated as liability payment, keep the required paperwork and be ready for an inspection at any reasonable request.
Supply HMRC with proof you lived abroad during the qualifying period
If you say you were outside the UK during the period that keeps you out of the Construction Industry Scheme, you must give HMRC a document from the foreign tax or social‑security authority that shows you were there. This proves you’re not subject to the usual CIS rules while abroad.
Reporting and filing 2
Apply for an in‑year CIS repayment
If you are a sub‑contractor in the construction sector and you have paid more CIS deductions than the tax you owe for the year, you can get the excess back. You must submit an application to HMRC before the year ends, with a declaration and the required evidence. HMRC will review the documents and, if they agree, refund the excess credit.
Submit overseas tax compliance evidence to HMRC
If you've lived abroad at any point during the qualifying period of the Construction Industry Scheme, HMRC must be shown that you have met comparable tax obligations in that country. You need to get a formal notice or documented confirmation from the foreign tax authority and forward it to HMRC. Failure to provide this evidence could break the scheme’s compliance requirements.
Practical guidance
Our guides explain how to comply with the requirements above.
Sections and provisions
60 classified provisions from this legislation.
Duties 19
- s.5 Scheme representative remains liable in relation
- s.7 Payment, due date for payment of amounts deducted and receipts
- s.10 Return and certificate if amount may be unpaid
- s.12 Certificate after inspection of records of contractors and sub-contractors
- s.17 In-year repayments of provisional excess credit
- s.25 Registration for gross payment or for payment under deduction and cancellation of registration for payment under deduction
- s.27 Evidence prescribed to satisfy the business test
- s.33 Absence abroad – evidence of living outside the United Kingdom
- s.34 Absence abroad – evidence of compliance with tax obligations
- s.35 Evidence of unemployment
- s.36 Evidence of full-time education
- s.45 Mandatory electronic payment
- s.47 Default notice and appeal person who appears
- s.48 Default surcharge specified payment
- s.51 Inspection of records of contractors and sub-contractors
- s.52 Inspection of records of sub-contractors – additional provisions
- s.53 Information as to change of control of close company
- s.54 Death of contractor
- s.56 Application by the Commissioners for Her Majesty’s Revenue and Customs of sums deducted under section 61 s Revenue and Customs
Powers 2
Definitions 7
- s.2 Interpretation the Act employer reference ICTA
- s.8 Quarterly tax periods SSCBA SSC Regulations Student Loan Regulations
- s.29 Evidence prescribed to satisfy the turnover test relevant turnover threshold relevant payment
- s.30 Number of partners or relevant persons
- s.37 Interpretation qualifying period
- s.38 Interpretation official computer system specified payment
- s.39 Whether information has been delivered electronically
Exemptions 12
- s.4 Monthly return
- s.6 Verification etc of registration status of sub-contractor and nominee
- s.9 Recovery from sub-contractor of amount not deducted by contractor
- s.11 Notice and certificate if amount may be unpaid
- s.13 Determination of amounts payable by contractor and appeal against determination
- s.14 Interest on amounts overdue
- s.18 Small payments
- s.19 Work carried out on land owned by person to whom payment is made
- s.20 Reverse premiums
- s.32 Exceptions from compliance obligations
- s.42 Information sent electronically on behalf of a person
- s.49 Surcharge notice and appeal