Understanding CIS Exemptions in Construction Payroll

In the realm of construction payroll, understanding CIS exemptions can be quite the puzzle. So, we sat down for a quick-fire session with Nick Pilgrim, our Director and Co-founder at EEBS. From clearing land to the removal of Japanese knotweed, Nick tackles our rapid-fire questions about what’s exempt from CIS and what isn’t. And yes, there’s even a Brucie Bonus question at the end! Stay tuned for a video of this interview, where Nick uses yes/no paddles to answer these questions too—it’s fun for the whole family!

Is cleaning up land prior to sale exempt from CIS?

Yes, it is exempt.

What about clearing a site for development?

That falls under the CIS scheme. Clearing land prior to sale does not necessarily mean it will be used for development. However, once development has been approved or started, it’s considered an alteration to the land, which is covered by CIS.

Is the removal of Japanese knotweed exempt from CIS?

It’s exempt if it’s in a domestic circumstance. However, if it’s part of site clearance in preparation for development, it’s covered by CIS.

What about a site foreman and a Clerk of the works?

They are both covered by CIS as they are part of the executive management of the construction operation.

Is the hire of scaffolding exempt from CIS?

Hire only is exempt. If you hire scaffolding with labour to install it, it’s covered by CIS.

Does the same rule apply to the hire of equipment, such as a digger without a driver?

Yes, the hire of equipment is outside of CIS unless it comes with a driver, in which case it’s covered by CIS.

Is cleaning a building after construction, but before handover, exempt from CIS?

No, it’s an integral part of the construction operation and is therefore covered by CIS.

What about normal building cleaning?

Normal cleaning is exempt as it’s not part of a construction operation.

Are new system installations, such as heating, wiring, or plumbing, covered by CIS?

Yes, all new systems of that nature are covered by CIS.

However, are the repair of heating, wiring, and plumbing systems exempt?

Yes, repairs are exempt. This includes significant repairs like installing a new boiler in a heating system or a new fuse box in a ring main because it’s considered maintenance and repair.

What about the work of professionals such as engineers, draftsmen, planners, scientists, architects, surveyors, or consultants?

Generally, they are exempt from CIS unless they are part of the site management process, in which case they are covered by CIS.

Can you clarify about consultants specifically?

If consultants are solely in a consultancy role, they are outside of CIS. However, if their role involves managing the site, they are covered by CIS.

Finally, how does invoicing work when both scenarios (covered by CIS and exempt) are involved?

If an electrical contractor is contracted to install a new system and provide maintenance services under one contract, all works are covered by CIS, even if separate invoices are issued. However, if there are two separate contracts—one for installation (covered by CIS) and one for maintenance (exempt)—then they are treated accordingly under CIS rules. Understanding these distinctions can help contractors navigate the intricacies of CIS compliance, reducing administrative burdens and ensuring accurate tax calculations.

Well done Nick, we’re delighted to say you have won the Brucie Bonus point and you’re now the grateful benefactor of a carriage clock. We hope you’ve all enjoyed playing along at home, until next time, goodbye!

Need some advice? Our knowledgeable, friendly team are ready to pick up the phone.

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Nick Pilgrim

M.D. | CIS Payroll Expert
01245 493832

Nick loves nothing more than chewing the fat over CIS payroll queries – actually that’s not strictly true; he likes playing golf and driving round Europe, but pick up the phone to him anyway!

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