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Overseas Construction Industry Clients

Companies from continental Europe are frequently attracted to the UK market where they can enjoy competitive advantages.

Despite talk of tax harmonisation, this can prove to be a veritable minefield. The following areas can easily be over-looked at considerable subsequent cost.

Construction Industry Scheme ("CIS")

In order to prevent a black economy in this industry the UK government has introduced complex rules requiring contractors and subcontractors to be registered under the CIS Scheme. In the absence of such registration, payments will be liable to a 30% deduction from 6 April 2007 onwards. Registration will allow you to receive payment either in full or after a deduction of 20% withholding tax.

Taxation of Employees

Construction industry businesses working in the UK may have their own employees working here. Under certain circumstances such employees may be subject to UK Taxation. The overseas business may also have an obligation to operate a PAYE scheme by which taxation must be deducted from wages at source. Overseas businesses can frequently be unaware of such obligations.

This may also apply if you use individual subcontractors. As a contractor you are responsible to check whether a subcontractor is to be considered as employed or self employed.

Value Added Tax ("VAT")

There can be advantages in obtaining voluntary registration for VAT as this enables input tax to be reclaimed. In certain circumstances VAT registration may be obligatory.

Once registered, you have an obligation to file VAT Returns, usually on a quarterly basis.

Corporation Tax

A place of business for taxation purposes can easily arise even without registration of a limited company or formal branch operation. Where there is a place of business in the UK, corporation tax is consequently payable in the UK. Corporation tax registration and annual tax returns will therefore be required.

BRAL and Blick Rothenberg are able to offer a comprehensive service to enable overseas companies engaged in the construction industry to comply with all of the relevant rules and regulations. We can help from initial advice and set-up to regular submission of returns and payments.

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Questionnaire

Follow the link below to our questionnaire for a general health-check and fax it back to us on +44 (0)20 7224 0553. You will then be contacted by one of our specialists.

Construction Industry Questionnaire (PDF)

Presentation

Follow the link below to a PDF presentation about the CIS

Presentation (PDF)

Petra Deters
pd@bral.com
+44 (0)20 7544 8955
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