Small builder and cis

Small builder and cis

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Former client got upset and left when I told him that he could not pay sub contractors without registering under CIS.

He telephoned today to tell me that new accountant has told him he does not need to register as he only does "domestics"

He carries out repairs to domestic premises and employs self employed plumbers etc.

He left 18 months ago.

Have I made a mistake.

Thanks for any advice.

Replies (2)

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Euan's picture
By Euan MacLennan
12th Jun 2014 15:03

No (probably)

It is a common misunderstanding that the exemption from CIS for homeowners paying contractors to do work on their homes trickles down to the contractor paying sub-contractors to work on people's homes.  The builder is a contractor within CIS and his subbies are sub-contractors within CIS.

The only question is whether the work done by the subbies is a construction operation or not.  The installation of systems of heating, drainage, sanitation, water supply and distribution are construction operations and payment to the subbies for such installation is subject to CIS, but repairs and maintenance of such systems (including replacing parts such as taps or radiator valves) is not.  Only if the subbies are never used for anything but maintenance and repairs would CIS not apply.

 

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By Tosie
12th Jun 2014 16:02

thank you Euan
Thank you for detailed reply .They are installing Central heating systems so I think I was right .many thanks

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