Optimise Accountants -

Do you need to be registered for CIS?

November 10, 2014

Posted by Simon Misiewicz on 10th November 2014

The construction industry scheme (CIS) might make you think you need to be a construction business/builder to need to be concerned with this. As well as traditional construction businesses like builders however, the scheme can also apply to businesses like:

  • labour agencies
  • staff bureaux
  • gangmasters – or gang leaders
  • and really importantly …property developers

Even if your business or organisation doesn’t do building work, it might still be a mainstream contractor or HMRC may treat it as a ‘deemed contractor’ – and require it to register with CIS – if it spends more than an average of £1m per year on construction operations over a three year period. The types of businesses and organisations that this could apply to include:

  • some large businesses, housing associations, other ‘arms length’ management organisations (ALMOs), local authorities, government departments, other public bodies

Businesses which do not include construction operations aren’t covered by the CIS rules as long as they spend less than £1m per year on construction work.

Property investors

Property investors aren’t covered by the CIS as long as they spend less than £1m per year on construction operations. Property investors buy properties to let out – or to make money when they sell them on. The type of work that does not require CIS registration is small renovations and redecoration.

Private householders who get construction work done on their own property – or have a new house built for themselves – aren’t CIS contractors (1).

Some jobs are specifically excluded from CIS. They include:

  • professional work such as architects’ services, scaffolding hire – with no labour, fire alarm installation, carpet fitting, manufacturing items such as windows, blinds and shutters off-site, making and putting up signs, delivering materials

One way to look at this is simply to answer this question: Am I undertaking small renovation work or major work? If minor then you do not need to register. If major then you are likely to be a property developer – see below:

Property Developers

With all this said if you are a property developer that undertakes the below types of work then you will need to be registered for CIS:

  • Undertake significant work such as buying properties, adding value through conversions and extensions
  • Converting a property into a different use (eg a house into flats or a commercial building)

The scheme defines ‘construction’ as a term with a broad meaning that includes (4):

  • building things
  • making things
  • putting things together
  • assembling things

Actions if you need to be registered for CIS?

HMRC will set up a contractor scheme for your business – and a PAYE (Pay As you Earn) scheme if you ask for one – and send you a contractor’s pack. The pack contains all the information and forms you’ll need to start working as a CIS contractor (2).

You will need to register for CIS as an employer for subcontractors. Please use this link: https://online.hmrc.gov.uk/registration/newbusiness/introduction

Or you can speak with us and we will administer the entire CIS process for £79.95 per month with no initial fee if you sign up with us this month.

References:

1.  http://www.hmrc.gov.uk/cis/intro/decide-if-cis.htm

2.  http://www.hmrc.gov.uk/cis/contractors/reg-obs.htm

3.  https://online.hmrc.gov.uk/registration/newbusiness/introduction

4.  http://www.hmrc.gov.uk/cis/intro/decide-if-cis.htm



Get your FREE ebook "Property Investors Guide"
Enter your information to recieve the eBook

First Name:*
Last Name:*
Lead Source:*
Email:*
Phone:*

Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk