What is the primary function of the Construction Industry Scheme (CIS)?

The primary function of the Construction Industry Scheme (CIS) is to ensure that contractors deduct taxes from payments made to subcontractors. This system is essential for facilitating tax compliance within the construction industry, where an extensive network of subcontractors often operates. The CIS requires contractors to register their subcontractors and determine the correct tax deductions to apply when payments are made. By doing this, the scheme helps to ensure that taxes are collected efficiently directly from the income of self-employed subcontractors, reducing the risk of tax evasion and improving overall tax collection rates.

Other functions such as regulating wages, assessing building safety standards, or providing funding for construction projects, while important in their contexts, do not align directly with the core purpose of the CIS. The focus of the CIS is specifically on tax deduction processes, making it a critical instrument for revenue collection in the construction sector.