CIS payments by schools

CIS payments by schools

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I am Chair of Finance for a LA maintained High School and I am in "conversation" with the LA auditors who are telling me that as they are the deemed contactor we should deduct CIS from our contractors as the legislation only applies to VA schools and those in the charitable sector.

I having read the CIS manuals on the HMRC Webb site believe that schools including maintained schools in the public sector are exempt from CIS.

Who is right?
Kevin Mitchell

Replies (4)

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By AnonymousUser
16th Jun 2007 11:24

Why not?
I think you are included in the CIS scheme, but am interested to know why you think otherwise. What is your reference ( other than the vague HMRC manuals already given )?

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By simong0516
16th Jun 2007 12:50

Exempt
The extract from the CIS Manual below appears to exclude maintained schools from the scheme.

CISR12090 - The Scheme: contractors: schools
Under S36 of the School Standards and Framework Act 1998, a school's governing body is a body corporate, a legal entity. However in spending its delegated budget, the governing body does so as the agent of the Local Education Authority (LEA).

Before 1999-2000, Foundation schools (then known as Grant Maintained schools), were financed directly from the Department for Education and Employment (DfEE) and payments by those schools were not caught by the Scheme because the DfEE itself was not defined as a contractor by ICTA88/S560.

Under funding arrangements set out at section 49(5)(b) of the School Standards and Framework Act 1998, the budget shares of all schools, including foundation schools, remain the property of the maintaining Local Education Authority until spent.

However, with the start of the new Scheme on 6 April 2007, SI2005/2045 reg 21. specifically excludes from the Scheme any payments made for construction operations by the governing body or head teacher of a maintained school. As such, the Scheme should not be operated in respect of such payments.

Private schools
For CIS purposes, private schools are treated in the same way as any other deemed contractor caught by FA04/S59 (1)(l). (See CISR12050 for more details on deemed contractors).

Voluntary aided (VA) schools
Voluntary Aided Schools are not treated as contractors for the purposes of FA04/S59 (1)(l) and do not have to operate the Scheme.

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By AnonymousUser
17th Jun 2007 11:35

It is not well written
You need to read what SI2005/2045 reg 21 says, which I do NOT have as I write this. My understanding, having read the explanation, is that foundation schools remain outside CIS, though funding has changed. Not that all LA schools are to become outside. It is not well written.

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By neileg
18th Jun 2007 09:23

Delegated budgets
Schools that hold delegated budgets are never the less still part of the Local Authority. I would imagine that every LA in the UK is large enough to be a contractor in CIS terms. It follows that any building work commissioned by the school falls within the CIS arrangements.

Where the school is a 'chequebook' school, then typically, building contracts will not pass through the LA purchasing system and may fail to be picked up as CIS contracts.

Individual schools that are not part of the LA, including VA and charitable trusts, will either qualify or not for inclusion as contractors in their own right. They are unlikely to have sufficient in value terms to cross the CIS threshhold.

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