Accountants need to be aware of CIS rules – new guide.
Are you an accountant with clients working in the construction industry? Do you have clients who may be thinking of trading in this area? If so, you need to be aware of the rules of the Construction Industry Scheme (CIS).
The tax regulations for the construction industry are complex and unlike the regulations for many other industries. Anyone not aware of the rules governing CIS may be subject to harsh penalties with tax tribunals rebutting claims of dis-proportionality.
There is a new guide to assist accountants with clients who work in construction, or have begun trading without any awareness of the complexities of CIS. The CIS Guide For Accountants has been written by Howard Royse in association with Sage. It outlines the scheme, explains who operates it and gives suggestions of the best ways to work with HMRC.
An example of how a client may be caught under the CIS rules is when someone buys, for example, an office block and converts it into flats. Under CIS this would be regarded as a construction activity because the investor has become a developer. However, if the investor commissioned an agent to manage the project, they may be exempted from registration.
It is this level of complexity which confuses many who decide to buy a property, do it up and sell it, without realising that in some cases they have strayed, unwittingly, into the construction industry.
Accountants are advised to keep up to date with how CIS rules may affect some of their clients.
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