This morning, we are talking about the changes to CIS regarding traffic management. Nick, could you give us an overview of the new CIS guidance?
Sure—from this month (March 2025), installation and management of traffic systems related to a construction operation are now within CIS. So, if you supply traffic management systems to roadworks, for instance, or for access to a construction site—including temporary signage—those services are now subject to CIS.
This change comes into effect this month, with the announcement having been made back in November. Essentially, all construction-related traffic management systems are now within CIS.
This was something that was previously excluded, wasn’t it? How has that changed?
Yes, exactly right. Previously, all traffic management systems were excluded. Now, the only exclusions are for non-construction-related activities, for example, traffic management for a festival or a concert remains outside of CIS.
Additionally, the supply-only of traffic management systems is exempt. But if you supply, install, and maintain the system, or provide maintenance, then it’s now within CIS.
So, for those familiar with CIS, it’s similar in some ways to other construction-adjacent services, like scaffolding, for example?
Exactly. If a contractor supplies and installs scaffolding, the whole supply is within CIS. If they simply supply it for another contractor to use, then the supply-only is outside of CIS. It’s the same with traffic management systems, if they’re supplied and installed, the entire supply is subject to CIS.
What steps should contractors take to stay compliant with these new rules?
There are two key issues: firstly, for contractors supplying these services, this may be entirely new territory. They may not have had much experience dealing with the Construction Industry Scheme. They’ll need to register as a subcontractor with HMRC for the construction industry.
If they are paying operatives on a self-employed basis, they will also have to make deductions under CIS. If they have employees, it won’t matter, but if they’re using self-employed individuals, those services will also be within CIS. That means they’ll need to register as both a contractor and a subcontractor and apply the full CIS process.
On the other side of the coin, construction firms that receive traffic management services, whether for roadworks or site access, will now have to verify the traffic management company within CIS and pay them accordingly. There is potential for significant deductions from companies new to CIS, especially if they aren’t registered or don’t have gross payment status. This could cause major cash flow disruptions.
So, it could be a big change for some firms. What practical support can EEBS offer to contractors who are unsure about the scheme or are just now navigating these changes?
We can offer pretty much whatever support they need. We can guide them through the registration process and ensure they understand their obligations. But time is running out—if they haven’t taken action yet, they really need to.
If they are using self-employed subcontractors, they must seriously consider the terms of engagement. If they can’t pass HMRC’s tests, the obvious solution is to outsource the supply of subcontractors to EEBS.
We can then ensure that at least their use of individuals is compliant with the regulations.
Don’t leave compliance to chance, act now. The rules are changing, and ensuring your subcontractor arrangements are compliant is crucial. Get in touch with EEBS today for expert guidance and a seamless solution that keeps your business on the right side of HMRC.
