I wonder if anyone can help me out with this please. I have a client who has a number of businesses, and the admin is not being handled well, so there is a lot of overlap between the businesses as regards paperwork, payments etc.
One of the businesses is a portfolio of buy-to-let properties, for which the client has a couple of employees, and a whole bunch of tradesmen who come and go as required for maintenance of the properties. Another of the businesses is a pub, which has been undergoing substantial renovations. So what we tend to get is one invoice per tradesman per week, which often applies to both businesses, because the tradesman has just gone wherever he's told, with no concept of which business is which. They also just buy materials as needed, so the invoice could be made out to any of the businesses.
The solution to this has been for the lettings business to invoice the other businesses for the employees' time spent working at the pub, any materials bought on behalf of the pub, and also any amounts invoiced by the tradesmen, in order for the expenditure to be recorded in the correct set of accounts.
It has now occurred to me that this might bring the lettings business within the scope of CIS - is that right? It's certainly not what the business was set up to do, but in fact it is carrying out construction work for another business.
I wouldn't think it is likely that this is the case unless the business has such a large amount of work carried out that it triggered the CIS rule. The following link seems to suggest an average of £1 million over a 3 year period if I'm reading it right:
Thanks for your help, Rob. My concern was that it wasn't covered by the rules about work on his own properties, for which he's well under the threshold. I just wasn't sure whether the fact that it was going through another business made a difference. Many thanks.
