The construction industry scheme works a little like a payroll scheme but for the constructions industry. Contractors employ subcontractors for jobs, on which they must deduct tax but not national insurance and pay it monthly to HMRC. These deductions are then used as advance payments towards the subcontractor’s tax and National Insurance bill. A contractor is a company or a person who employs a subcontractor to do construction work and may be a sole trader, a partnership or a limited company.…