I maintain the accounts for a landscaper and he has very recently started using sub-contractors. He only works for General Joe Public, so my question is, does general landscaping fall in the prevue of the construction scheme?
I am also trying to get hold of someone from the CIS Helpline for them to clarify but they seem to be permanently busy and have a recorded message saying they can't take the call now and to call back later!
Hi Corry
Before you look at CIS, have you considered IR35/are they really not self employed?
If genuine contractors there is not enough information here to determine whether they are in or out. The relevant Finance/taxes Act determines what is governed by the scheme and what is covered or not. Failing that try CIS340 from HMRC as to what is excluded/included from a landscaping perspective, based on your specific client.
HTH
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I have asked my client to confirm if the labourer is registered with HMRC as self-employed. But wanted to find out about CIS while they are doing that. I'll read up on IR35
I have asked my client to confirm if the labourer is registered with HMRC as self-employed. But wanted to find out about CIS while they are doing that. I'll read up on IR35
Thanks for replying
Hi Corry
Im afraid him checking with the labourer will not cut it. It is the full responsibility of your client to check out whether indeed he should be under PAYE or not. With your guidance. So perhaps you could expand on what it is that your client actually does (more specifically) in his business and then what this actual labourer does for him/when/how/does he have the right to send someone else if he is ill/whose tools he uses/who determines what work is done at what rate of pay blur blur blur. Then we can say if he is indeed an employee or truely a subbie. I suspect the former and suspect the 'expected' treatment by your client might well be the latter given the usual way of this industry.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I understand the onus is on my client, I have asked all of the questions you pose and am waiting for the response. Just want to get ahead and be able to answer follow-up questions.
I understand the onus is on my client, I have asked all of the questions you pose and am waiting for the response. Just want to get ahead and be able to answer follow-up questions.
Thanks
ok, but cant advise on CIS status without understanding about your clients business as there are two many variables to guess. Perhaps you can add some detail on that side of it?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
My client does general gardening work / maintenance for private residences some of his jobs have included but are not limited to: weeding, strimming, mowing the lawn, hedge cutting, patio laying, hedge trimming, re-designing and the planing of gardens, removal and disposal of waste, cutting down and removal of trees etc - is that helpful?
As Joanne says it is hard to give a definitive answer, I would suggest from what you have described that some of the work may well fall within CIS, I think you would need to look at each individual project and what the work entails to see if it falls within the scheme.
Your OP does say that he has started to use sub-contractors already so if the work they are doing does fall within CIS then he needs to get them verified before paying them.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Oops forgot about this one as I was out on an early jolly!
How did you get on interrogating the CIS form I mentioned? The answer is in there.
I suspected at the outset that the client was a jobbing gardener in the main who does some occasional real landscaping work and that being the case I would suggest this subbie is in fact just an employee and this fact needs to be rigourousky checked out first.
Most of what you list is tending gardens doesn't fall into the scheme. Failing that deemed contractors can be authorised not to apply the CIS scheme for amounts less than £1k excl materials so this might cover a chunk of the other work.(2.7 of doc I mentioned).
The rest you need to look at what is considered construction operations, which is as I alluded to earlier, defined in law. See finance act 2004, section 74 and if you can't be bothered reading that, just look at the CIS doc again (App b). As I said some is excluded some included. I asked for further info as I wanted to make sure he wasnt JUST a jobbing gardener. Appendix c will give you more idea based on, as Doug rightly states, a contractor by contract basis, depending on the work included.
Sorry for any typos, too much wine and on a tiny screen!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
So, having just spoken to the CIS helpline - general estate management, planning and re-designing of private residences are excluded from the construction scheme. If however, it is part of a new build, housing estate etc then it is included.
Well then I would have to disagree with what you were told, if your client had a job to lay a new patio for a homeowner and he decided to sub-contract that work out I believe that it would fall within CIS and that he would have to register as a contractor and operate CIS for the subbie
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Well we all know that we shouldnt rely on the tripe that we get told by the minimum wage paid staff at HMRC, as has been said on here MANY MANY times. That they mis-interpret their own guidance and dont always follow the letter of the law, which is why so many cases with them are lost by HMRC. CIS team are generally better than the main team, but relying on such guidance when you cannot back it up in law in the event of an inspection (in what is a risky trade/bound to attract their attentions for such) is a risky venture.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I have the name, time and team number of the person I spoke with so would ask to listen to the call recording for evidence of what I was told
Did you make it clear to the CIS team that you wanted to know if your client's subbies fall into CIS. The client working on his own, in a residential garden, would not fall into CIS.
I have the name, time and team number of the person I spoke with so would ask to listen to the call recording for evidence of what I was told
That will not stand up in a court of law. Nor in a tribunal situation. HMRC website actually states you should not rely on the information given by their agents.
Sorry Corry, but we are actually trying to assist you so that in the event of an inspection this does not bounce back to your PII cover, assuming you have some. Plus trying to protect your client.
Have you actually had taken a look at the LAW???
Telling them he is your clients labourer is not the full facts of the matter. But that description makes it look like an employer/employee situation.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I have gone back to my client asking him to verify if his labourer, that he uses sometimes, meets the criteria of being self employed or if he should be PAYE so am waiting to hear back. All I can do is advise on the information I am given and continue to process the paperwork as I am advised.
Of course I have insurance!!
As mentioned in an earlier post, I am still investigating the situation as it was only brought to my attention yesterday late afternoon.
Well then I would have to disagree with what you were told, if your client had a job to lay a new patio for a homeowner and he decided to sub-contract that work out I believe that it would fall within CIS and that he would have to register as a contractor and operate CIS for the subbie
I was just on the phone to the CIS helpline about an unrelated issue so thought I would pop this question in at the end
I worded it the same as above and the advisor straight away said that he should register as a contractor and apply CIS
Just shows you ask 2 different people and you can get 2 different answers or you can ask the question in 2 different ways and you get 2 different answers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
When I spoke to the cis team about a similar situation I was advised that jobs such as patio laying, building garden walls, paths and decking all fall under the cis scheme.
Finance Act 2004, section 74 defines the meaning of construction in law https://www.legislation.gov.uk/ukpga/2004/12/section/74
74 Meaning of construction operations (1)In this Chapter construction operations means operations of a description specified in subsection (2), not being operations of a description specified in subsection (3); and references to construction operations (a)except where the context otherwise requires, include references to the work of individuals participating in the carrying out of such operations; and (b)do not include references to operations carried out or to be carried out otherwise than in the United Kingdom (or the territorial sea of the United Kingdom). (2)The following operations are, subject to subsection (3), construction operations for the purposes of this Chapter (a)construction, alteration, repair, extension, demolition or dismantling of buildings or structures (whether permanent or not), including offshore installations; (b)construction, alteration, repair, extension or demolition of any works forming, or to form, part of the land, including (in particular) walls, roadworks, power-lines, electronic communications apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, reservoirs, water-mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence; (c)installation in any building or structure of systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection; (d)internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration; (e)painting or decorating the internal or external surfaces of any building or structure; (f)operations which form an integral part of, or are preparatory to, or are for rendering complete, such operations as are previously described in this subsection, including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscapingand the provision of roadways and other access works. (3)The following operations are not construction operations for the purposes of this Chapter (a)drilling for, or extraction of, oil or natural gas; (b)extraction (whether by underground or surface working) of minerals and tunnelling or boring, or construction of underground works, for this purpose; (c)manufacture of building or engineering components or equipment, materials, plant or machinery, or delivery of any of these things to site; (d)manufacture of components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or delivery of any of these things to site; (e)the professional work of architects or surveyors, or of consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape; (f)the making, installation and repair of artistic works, being sculptures, murals and other works which are wholly artistic in nature; (g)signwriting and erecting, installing and repairing signboards and advertisements; (h)the installation of seating, blinds and shutters; (i)the installation of security systems, including burglar alarms, closed circuit television and public address systems. (4)The Treasury may by order made by statutory instrument amend either or both of subsections (2) and (3) by (a)adding, (b)varying, or (c)removing,any description of operations. (5)No statutory instrument containing an order under subsection (4) shall be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.
HMRCs own written guidance - CIS 340 (link to the manuals here as well)
C.1 Contracts that include work that is included and work that is excluded
If a contract includes some construction operations that are within the scheme and some that are excluded, all payments made under that contract will come within the scheme.
C.3 Included and excluded operations
Site preparation
Operations included:
demolition of, for example, buildings, structures and tree-felling
preparation of site and site-clearance, earth-moving on site, excavation, tunnelling and boring
Operations excluded:
delivery of materials
transport of spoil from site
Construction
Operations included:
preparation and laying of foundations and piling
actual construction, alteration or repair of a permanent or temporary building or civil, chemical or other industrial engineering work or industrial plant or structure - for example:construction of site facilities including site huts, portable buildings and site hoardings
construction, repair and resurfacing of roads and bridges including white-lining
provision of temporary and permanent roadways and other access works such as drives
erection or dismantling of scaffolding falsework and formwork
plant hire with operator for use on site
installation of fire protection systems designed specifically to protect the fabric of the building (such as sprinkler systems, fireproof cladding) rather than a fire warning (alarm) system
installation of prefabricated components or equipment under supply and fix arrangements.
transport of materials on site
internal cleaning of buildings and structures carried out in the course of, or on completion of, their construction, alteration, extension, repair or restoration
site restoration and landscaping
installation, structural repair and painting of lamp standards, traffic lights, parking meters and street furniture
construction of concrete and marble floors
installation of and repair to:painting and decorating the internal or external surfaces of any building or structure
glazing
doors and rolling grills or security shutters
kitchens and bathrooms
shop-fittings including fixed furniture (except seating and freestanding display cabinets)
Operations excluded:
manufacture or offsite fabrication of components or equipment, materials, plant or machinery and delivery of these to the site - for example:manufacture and delivery of prefabricated site facilities
traditional building materials
prefabricated beams and panels
ready-mixed concrete
delivery of road-making materials
delivery, repair or maintenance of construction plant or hire equipment without an operator - for example, concrete mixers, pumps and skips
external cleaning (other than painting or decorating) of buildings and structures
drilling for, or extraction of, oil or natural gas
extraction of minerals, boring or construction of underground works for this purpose
manufacture, delivery, repair, servicing or maintenance of these items:replacement of system parts not involving other construction operations (for example, taps or a radiator)
power supply and distribution
drainage
lifts, plant or machinery needed by the specification of a building under construction or alteration
tree planting and felling in the ordinary course of forestry or estate management
manufacture, installation and repair of artistic works (for example sculptures and murals) which are wholly decorative in nature (not functional items caught by the scheme which incidentally have artistic merit)
Apologies for the formatting. HTH put it to bed. That is, of course, assuming he isnt an employee (which is a WHOLE different issue.)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
