Case Studies:
Construction Industry Scheme

With many European countries presently in the doldrums and in the light of under capacity in the British construction industry, many overseas construction companies have been successfully tendering for work in the UK. As they are often family businesses their names must remain confidential, however Blick Rothenberg has been helping many of them in resolving UK tax issues, which are often unexpected and potentially crippling.

The main problem has centred on the Construction Industry Scheme (CIS) operated by the Inland Revenue, whereby subcontractors and in certain instances contractors can receive absolutely no payment for their work unless they have and can demonstrate appropriate CIS registration. Different forms of registration are available depending on their circumstances. This can entitle them either to receive full payment or alternative payment after deduction of 18% withholding tax (reclaimable at the end of the contract if they are not subject to UK Corporation tax). Clearly it is essential that they are registered, but many such overseas companies are totally and understandably ignorant of this requirement and so come to us in crisis when expected cash flow does not materialise.

Our team, including Steven Bruck, Petra Deters and Birgit Podobnik have helped many such companies and their advice extends to VAT registration, liability to register for PAYE and permanent establishment rules (relevant for corporation tax registration).

The issues raised are often quite complex and our multi-lingual skills are often in heavy demand. If you have any requirement in this area, in the first instance please contact Steven Bruck on +44 (0)20 7544 8970, email steven.bruck@blickrothenberg.com.