CIS and property developers

CIS and property developers

Didn't find your answer?

I know this is a bit of a silly question. I assume a property developer doing 5-6 projects a year (modernisation/refurb) is a contractor for CIS purposes and therefore needs to follow the scheme when making payments to say an independent building firm that carries out the work on one of his properties.

How does this differ from a someobe (say a landlord) who modernises a property and then lets it out. Surely the type of work he is having done on his property is within the CIS scheme, but I've yet to come across a client that is a landlord and pays for repairs/construction work via CIS (whether they have one property or several).
michael

Replies (2)

Please login or register to join the discussion.

Euan's picture
By Euan MacLennan
02nd Apr 2007 18:20

It is the business
A property developer is trading in the construction and sale of buildings and must register as a contractor under the CIS. Property developers are listed as "mainstream" contractors in CIS340, the guide to the new scheme.

A landlord who lets property is not actually trading (although letting profits are now calculated as if it is a trade) and is certainly not in the business of construction. Any construction work is incidental to the main purpose of deriving rental income from an investment in property. A landlord is therefore excluded from the CIS as is a homeowner.

Thanks (0)
avatar
By J Lessels
04th Apr 2007 14:04

Watch this space
I understand that the question of CIS and landlords is going to be addressed by the Revenue in the very near future. Apparently the strict interpretation of the law could deem landlords repairing properties to be engaging in construction, but this is not what the Revenue want. They don't have enough pieces of paper and the computer systems couldn't take it!

Thanks (0)