Glossary of Key Terms

A UK tax scheme where contractors deduct money from subcontractors' payments for tax and National Insurance. Deductions are made at source - either 20% for registered subcontractors or 30% for unregistered ones. These deductions count as advance payments towards the subcontractor's tax and National Insurance bill. Contractors must verify subcontractors with HMRC before paying them and submit monthly returns detailing all payments and deductions made through CIS.

A secure financial mechanism designed to reduce risk and ensure payments are made promptly and simultaneously (in parallel) across the entire construction supply chain.

A mechanism where VAT-registered subcontractors do not charge VAT on their services to contractors. Instead, the contractor accounts for the VAT through their VAT return. This applies to most construction services between VAT-registered businesses in the UK's construction industry.

A feature that provides limited visibility of information without anything commercially sensitive. More details can be found here.

A late payment is a payment made after the due date but before the end of the billing cycle, often incurring a fee. A non-payment or missed payment occurs when a payment is not made at all. Noted as being "rife" in the current construction payment process, leading to disputes, low margins, and business failures.

Instead of a linear, cascade-style payment from client down through the tiers of contractors/suppliers, payments are made concurrently to multiple parties in the supply chain.

Financial guarantees or insurance products often required on construction projects to cover the client if a contractor fails to complete the work.

A dedicated bank account for a specific construction or development project that acts as a central hub where project funds are securely held and distributed in a timely manner. PBAs were introduced primarily to address late and non-payment in the construction industry.

The Organisation identified in the Saible platform as responsible for the Project.

A portion of a payment withheld by the project owner for a set period, typically as security against defects or non-completion of work.

A dedicated bank account used to hold Retentions in trust for a project.

The process of securely isolating and protecting project funds, ensuring the money is only used for the project's intended payments.

A formal, standard legal arrangement that ring-fences project monies and helps protect them from insolvencies. Funds can only be moved according to the terms of the Trust.