Private householders are never treated as Construction Industry Scheme (CIS) contractors, no matter how much they spend on construction operations.
Similarly, some businesses that would normally be considered to be deemed contractors do not need to apply CIS when they pay for construction work on property used for their own business. The types of property covered by this exemption include offices, warehouses and nursing homes.
The normal CIS rules for contractors also do not apply when:
- A deemed contractor pays for a small construction contract of less that £1,000 – excluding material costs – and has authorisation from HMRC to exempt it. A mainstream contractor is not allowed the same exemption.
- A contractor pays a subcontractor less than £1,000 – excluding material costs – to do construction work on the subcontractor’s own property – or on any agricultural property where the subcontractor is the tenant – and has authorisation from HMRC to exempt it.
- The governing body or head teacher of a local education authority maintained school pays for construction work on behalf of the local education authority.
- A charitable body or trust – but not its trading subsidiary – pays for construction work.
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax and VAT Consultancy Team.