HMRC can recover amounts from the subcontractor that should have been deducted from the contractor under the construction industry scheme (CIS) in certain cases.
This applies where1:
- Ìý
•ÌýÌýÌýÌý it appears to HMRC that the amount that should have been deducted on account of tax from contract payments in accordance with FA 2004, s 61 ('the deductible amount') exceeds the amount actually deducted by the contractor from contract payments ('the amount actually deducted'), and
- Ìý
•ÌýÌýÌýÌý either condition A or B below is met
Condition A
To meet condition A, the contractor must satisfy HMRC that they took 'reasonable care' to comply with FA 2004, s 61 and with the CIS regulations, and that the failure to deduct the excess was either due to an error made in good faith or because they genuinely believed that FA 2004, s 61 did not apply to the payment2.
The excess in this situation is the amount by which the deductible amount exceeds the amount actually
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Web page updated on 17 Mar 2025 17:24