Where a company is not authorised to receive payments on gross payment status for construction operations carried out in the UK, the payment will be subject to a deduction under the Construction Industry Scheme at either the standard or higher rate of deduction (FA04/s61).

From 6 April 2002 limited companies that are subcontractors and having deductions made from their payments must set off these deductions against the monthly or quarterly payments due to HMRC in respect of the following (FA04/s62):

PAYE tax and NIC contributions due from the company's employees

Student loan repayments due from the company's employees

CIS deductions due from the company's subcontractors.

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