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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
Updated
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The Scheme: primary legislation: section 59

This section defines a contractor.

A contractor is

  • someone who is carrying on a business which includes construction operations, that is, a person whose activities include executing or arranging for construction operations, or supplying labour for such operations: FA04/S59 (1)(a)
  • any public office or department of the Crown (including any Northern Ireland department and any part of the Scottish Administration): FA04/S59 (1)(b)
  • the Corporate Officer of the House of Lords, the Corporate Officer of the House of Commons and the Scottish Parliamentary Corporate Body: FA04/S59 (1)(c)
  • any local authority: FA04/S59 (1)(d)
  • any development corporation or new town commission: FA04/S59 (1)(e)
  • the Commission for the New Towns: FA04/S59 (1)(f)
  • the Secretary of State in respect of contracts made under section 89 of the Housing Associations Act 1985: FA04/S59 (1)(g)
  • the Housing Corporation, a housing association, a housing trust, Scottish Homes, and the Northern Ireland Housing Executive: FA04/S59 (1)(h)
  • any NHS trust: FA04/S59 (1)(i)
  • any HSS trust: FA04/S59 (1)(j)
  • any body or person specifically named in regulations as a contractor: FA04/S59 (1)(k)
  • any person carrying on a business whose expenditure on construction operations in the three years ending with the last period of account or lesser period exceeds certain limits: FA04/S59 (1)(l)

The remaining subsections of Section 59 provide for

  • the public bodies specified in FA04/S59 (1) (b) to (f) or (h) to (k) to be regarded as contractors only when their average expenditure on construction operations exceeds £1 Million a year for the three years ending at the preceding 31 March: FA04/S59 (2)(a)
  • the public bodies mentioned above to cease to be regarded as contractors when their expenditure for the three years ending at the preceding 31 March falls below £1 Million a year in each of those years: FA04/S59 (2)(b)
  • the businesses specified in FA04/S59 (1)(l) to cease to be regarded as contractors when their average expenditure on construction operations falls below £1 Million in each of three years ending with the last period of account: FA04/S59 (3)
  • where all or part of a company’s trade is transferred to another company, construction expenditure incurred by the transferring company to the date of transfer to be apportioned in determining whether either company should be treated as a contractor: FA04/S59 (4)
  • definitions of the expressions ‘development corporation’, ‘housing association’, ‘housing trust’, ‘new town commission’, ’NHS trust’ and ‘HSS trust’ by reference to the legislation governing these bodies: FA04/S59 (5)
  • clarification of the use of the term ‘a body or person’: FA04/S59 (6)
  • HM Revenue & Customs may by regulation remove from this section any references to bodies that have ceased to exist: FA04/S59 (7)