HMRC have released new guidance for overseas contractors and subcontractors who will need to be aware of the Construction Industry Scheme (CIS) rules.

With effect from 6 July 2016, the Finance Act 2016 brought in rules to subject all Profits from dealing in or developing UK land to UK tax.

The rules were brought in as a replacement for the Transactions in Land rules.

Together with the Non-Resident CGT on UK residential property and most recently the announcement that non-residents will be subject to Taxation on gains on UK immovable property, both residential and commercial, these rules are part of the UKs plan to ensure that profits relating to UK land are taxed in the UK.

The changes will mean that any overseas business that acts as a contractor or subcontractor will need to register for CIS.

  • Individuals and partnerships will register for CIS and follow the same CIS rules as UK contractors and subcontractors.
  • Non-UK companies will need to register for CIS and Corporation Tax before starting work.
    • CIS registrations must be sent to HMRCs non-resident specialist CIS team:
      CIS Registrations
      Charities Savings and International 1
      HM Revenue & Customs
      BX9 1AU
    • HMRC advise that the non-UK company CIS registration process can take up to 6 weeks and a tax clearance certificate from the home country should be included in the application.
    • Corporation Tax registrations must be sent to HMRC in writing:
      Corporation Tax Services
      HM Revenue & Customs
      BX9 1AX

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