Readers' forum: Scheme mistake

I have been appointed recently to act for a new client who is a local builder. He carries out work for other building contractors and also for private individuals. He is registered under the HMRC construction industry scheme and can receive payments without deduction of tax. I am preparing his accounts and noticed that he was making payments to some subcontractors both under deduction of tax and gross. When I questioned him on this he said this was because some of the work related to jobs that he was carrying out for a building contractor (and for which he deducted tax) but some related to work for private individuals (when he did not). I explained that both were building works and a deduction should have been made. He replied that his previous understanding was that private work was not within the scheme so could be paid in full.

The...