If you work in the building trade, chances are that you’ve heard mention of the Construction Industry Scheme, generally referred to as CIS. Yet what exactly does this entail- and how does it affect you personally?
What it’s for
The Construction Industry Scheme is administered by HMRC and regulates payments made within the building trade. If you’re a contractor or subcontractor, you should register with the scheme. A contractor within the scheme is defined as anybody who uses subcontractors for building work; a subcontractor is defined as anyone who is self employed and has an arrangement to do work for a contractor. It isn’t restricted to individuals- companies can be counted as subcontractors.
It isn’t restricted to builders: the Scheme can also apply to labour agencies, gangmasters and property developers. Even if your business isn’t classed as a building company, it will still fall under the Scheme if you spend over £1 million on construction work over a three year period. This means that businesses such as housing associations, local authorities and government departments may have to register with the scheme.
What does it cover?
Generally speaking, the CIS covers any work done to permanent buildings, temporary structures (such as scaffolding) or civil engineering (such as bridges). This may include work such as general construction, site preparation, repairs and refurbishment and demolition.
If you are doing certain types of work, you may not have to register. Architecture and surveyor jobs aren’t covered, likewise manufacturing products off site (e.g. windows and shutters). If some parts of your work fall under CIS and others don’t, you will still have to register.
A contractor may not have to register if certain requirements are met: you’re paying for construction work on your own personal property, which isn’t being sold or let (this only applies to contractors who spend over £1 million a year); you’re paying for a contract worth less than £1,000- in which case you need to apply to HMRC to exempt it; the work is being paid for by a governing body or trust.
How can we help?
If you are self-employed and have had to register with the Construction Industry Scheme, you may need to register with an umbrella company. By joining ICS Umbrella you’ll benefit from a quick set up with same day processing and payments and all contract administration and invoicing carried out by our experienced staff. If this sounds good to you, don’t hesitate to get in touch at 0800 195 3750!