Q: I have recently started a business which offers consultancy for building and engineering. I’m running the business side for my new partner, who is the building consultant. So, I’m not the expert in the field and I’m trying to get a fuller understanding of our potential obligations with regard to the Construction Industry Scheme (CIS) and the need for registration. Can you provide any guidance?
A: For most people in the building and construction industry, the CIS is a key piece of regulation that is very important to understand and comply with. It is mandatory for constructors to register for the CIS. However, there are a number of exceptions, depending on certain roles and types of function.
The work of certain professionals may be excluded, meaning they do not have to be registered for the scheme. However, this is the case ‘only if they are acting purely as consultants’, according to the HMRC guidelines, which adds: ‘Typically, this would include the production of designs, plans, technical assessments and reports relating to construction projects including site testing.’
Furthermore, under ‘operations excluded’, HMRC lists ‘professional work of architects, surveyors or consultants in building, engineering, decoration (interior or exterior) or landscaping.’
Looking at these guidelines, it would appear your new venture would fall outside of the requirements of the CIS and you and your partner would not need to register. However, it is wise to be cautious because the guidelines also state the following: ‘Any work that goes beyond a consultative or advisory role and becomes the supervision of labour or the co-ordination of construction work using that labour is not excluded from the scheme.’
So, if your partner feels their work is broader, at any time or to any extent, than simply consultancy, it’s certainly worth seeking more detailed advice.
Please give our team a call if you’d like to explore the regulations and compliance more deeply.
And for anyone else in a similar position, it’s worth noting that there are a few other examples of exceptions in the CIS where you do not have to register if you only do certain jobs. These include:
- architecture and surveying
- scaffolding hire (with no labour)
- making materials used in construction including plant and machinery
- delivering materials
- carpet fitting
- work on construction sites that’s clearly not construction – for example, running a canteen