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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
Updated
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The Scheme: construction operations: professional work

CISR14600 Action guide contents
   

FA04/S74 (3)(e) excludes the following operations from the Construction Industry Scheme:

  • ‘the professional work of architects or surveyors, or of consultants in building, engineering, interior or exterior decoration or the laying-out of landscape’.

Note that this exclusion does not apply to all ‘professionals’ involved in construction projects on a self-employed basis. It applies to surveyors and architects even though their professional disciplines do or may include supervisory or executive function or responsibility.

For other professionals it will only apply to those whose services are consultative, not executive. This means that they stand apart from the execution of construction work or its management.

The work of architects or surveyors, if done within their normal professional discipline, is excluded in all circumstances. Other professionals are ‘consultants’ if they supply technical advice, assessments, plans or designs but are not involved in the day-to-day execution or oversight of a construction project. For example, a consulting engineer, interior decorator or draughtsman providing a design may be regarded as a ‘consultant’. They are not in the chain of command running from contractor to the worker. They provide designs, advice or recommendations that are acted upon by others accountable to the main contractor.

Bear in mind, however, that there are many people operating in the construction industry who are professionally qualified or provide managerial or supervisory services and who are not, or not exclusively, consultants. They include engineers, clerk of works and project managers. Being closely involved in the execution or supervision of a construction project is a normal part of their work. When operating on a self-employed basis they can be ‘subcontractors’ under a contract relating to construction operations because they are ‘answerable to the contractor for the carrying out of the construction operations by others’ (FA04/S58 (b)).

Difficulties

Note that the job title may not always clearly indicate whether the professional is acting within their professional discipline. Where the professional’s work is uncertain, you will need to make enquiries to establish the true nature of the work and any available contracts should make the position clearer.

The following paragraphs deal with some special cases.

Architects

When operating within their normal professional discipline architects are subject to the exclusion. Some architects may go beyond providing a building design, however, and undertake to manage the project for a contractor or client. In this case the architect is additionally acting as a developer or project manager and the exclusion may no longer apply.

Surveyors

The exclusion was designed to cover the traditional functions of these ‘professionals’ namely, surveying land and inspecting properties. It may, however, also be extended to subcontractors performing comparable functions in specialised areas of construction. Examples of such work are

  • soil testing
  • industrial radiography
  • non-destructive testing
  • welding inspection
  • environmental testing
  • pipeline inspection (using, for instance, robot vehicles, known as ‘pigs’).

Note, though, that if the ‘survey’ goes beyond inspection to include carrying out remedial work, the exclusion no longer applies. This would be true, for instance, if a robot vehicle surveyed a pipeline internally and then made good defective joints as some are designed to do.

Occasionally, a surveyor may engage labourers on subcontract terms to carry out work such as digging an inspection trench necessary for the survey, or boring for soil samples. Such work is regarded as part and parcel of the professional work and is not subject to CIS.

Excluded from CIS

The exclusion does apply to

  • planning
  • all professional activities of architects, surveyors and other professionals acting in a wholly consultative capacity
  • inspecting or testing.

Within CIS

The exclusion does not apply to

  • an architect also acting as a developer
  • professionals (including architects and surveyors) whose work involves project management or supervision
  • site foremen
  • clerks of works engaged in a supervisory capacity.

Note; Often, site foremen and clerks of works will be employed on a PAYE basis in which case they will be outside the scheme.