09 November 2021 
Julia Ascott, Employment Taxes Specialist
HMRC have contacted BUFDG to confirm that it will be sending letters to the HE sector to recommending they register under the Construction Industry Scheme (CIS).
"Just a heads up that HMRC are sending letters to customers within the Education sector to prompt customers to register for the Construction Industry Scheme if they meet the requirement to register and to raise awareness of the important role they play in assuring the correct tax is paid under the Construction Industry Scheme (CIS).
Under the Construction Industry Scheme (CIS) contractors deduct tax from payments made to sub-contractors. CIS acts as a withholding tax and is fundamental to compliance and assurance across the UK construction industry. Legislative changes to registration requirements for deemed contractors introduced from 6 April 2021 will apply to the customer population within the Education sector.
Through the issue of these letters, HMRC aims to help customers in the Education sector to be compliant through education, support and on-going collaboration."
A copy of the template letter has been provided.
The letter doesn’t seem to make it abundantly clear (aside from some manual notes) that charities are exempt from operating the CIS but subsidiary companies are not and it is the latter group that HMRC are targetting for compliance with this letter.
If you do have subsidiaries carrying out construction operations, they may be 'deemed contractors' under the CIS dependent on their spend on construction works. If the cost is more than £3m, you will need to register under the CIS as a deemed contractor. However, if the construction work will be entirely on your own property, there may be an exemption available to de-register for the scheme.
Next steps - check HMRC guidance to answer the following questions:
