The Construction Industry Scheme requires contractors to deduct tax from payments to subcontractors and pay it to HMRC on their behalf. It applies if you pay subcontractors for construction work, and it applies whether you are a builder, a developer, or a business outside construction that spends heavily on it. Construction operations are defined broadly — site preparation, alterations, demolition, installation of systems, decorating, repairs — but there are carve-outs that surprise people, including architecture and surveying, carpet fitting, and manufacturing materials off site. If you are a subcontractor being paid for construction work, you are in it from the other side and will have deductions taken from your payments. Being registered matters: it is the difference between 20% and 30% coming off.