Hi

I have a question which seems to be puzzling me as well as my
accountant and I'm wondering if I could canvass some other opinions!

I run a cleaning company and we occasionally carry out builder's
cleans i.e. we go onto a site in the final stages of construction and
carry out cleaning works prior to handing the project over to the
client.

My accountant is of the opinion that we do not need to be CIS
registered as we are not carrying out construction work , but we
recently completed a clean and were told by the subbie that we were
working for that he would require our CIS verification.

I contacted HMRC and they confirmed that we would need to register.

However, on receiving the CIS guide for contractors and subcontractors
I have had a look through the appendix which quotes the following from
the Finance Act 2004 Section 74

"The following operations are subject to subsection [3] ... (which I
take to mean 'will require those companies or individuals carrying out
these operations to complete CIS registration')

the relevant part for me is:

"(d) internal cleaning of buildings and structures, SO FAR AS CARRIED
OUT IN THE COURSE OF THEIR CONSTRUCTION, ALTERATION, REPAIR, EXTENSION
OR RESTORATION" (emphasis mine)

My question is; if I am cleaning windows and other parts of the
building internally in order to prepare the building for transfer to
the client is this work being carried out "in the course of (its)
construction, alteration, repair, extension or restoration"?

My accountant thinks not, and I am inclined to agree.

Could anybody please offer their thoughts?

Many thanks for any contributions.

MJ

M.J. wrote:

> I have a question which seems to be puzzling me as well as my
> accountant and I'm wondering if I could canvass some other opinions!
> 
> I run a cleaning company and we occasionally carry out builder's
> cleans i.e. we go onto a site in the final stages of construction and
> carry out cleaning works prior to handing the project over to the
> client.
> 
> My accountant is of the opinion that we do not need to be CIS
> registered as we are not carrying out construction work , but we
> recently completed a clean and were told by the subbie that we were
> working for that he would require our CIS verification.
> 
> I contacted HMRC and they confirmed that we would need to register.
> 
> However, on receiving the CIS guide for contractors and subcontractors
> I have had a look through the appendix which quotes the following from
> the Finance Act 2004 Section 74
> 
> "The following operations are subject to subsection [3] ... (which I
> take to mean 'will require those companies or individuals carrying out
> these operations to complete CIS registration')
> 
> the relevant part for me is:
> 
> "(d) internal cleaning of buildings and structures, SO FAR AS CARRIED
> OUT IN THE COURSE OF THEIR CONSTRUCTION, ALTERATION, REPAIR, EXTENSION
> OR RESTORATION" (emphasis mine)
> 
> My question is; if I am cleaning windows and other parts of the
> building internally in order to prepare the building for transfer to
> the client is this work being carried out "in the course of (its)
> construction, alteration, repair, extension or restoration"?
> 
> My accountant thinks not, and I am inclined to agree.

I fear your inclination is indefensible, it seems blatantly obvious
that your cleaning *is* carried out in the course of construction.

It would hinge, I think, on what exactly "in the course of constuction"
means.  One definition might be that any work which is paid for by the
construction company on its own behalf is in the course of construction.
Another might have it mean *during the period* delimited by when
construction begins and ends.

When does construction end?  When the job is finished and the project is
ready to hand over to the client.  If the project is not deemed ready to
hand over until it has been cleaned, this would suggest that the cleaning
forms part of the construction.

For it not to count as part of the construction (for it not to count as
being carried out in the course of it), it would have to be carried out
after completion, which I think would have to mean after the project has
passed the client's acceptance criteria.  Do these criteria specify that
the place should be clean?  If so, the cleaning forms part of the overall
contruction job, and happens in the course of construction.  If not, you
could be argued to be working for the client, not the builder, and it would
not be in the course of contruction, but your description suggests that
this is not what's happening.

On 21 May, 17:01, Ronald Raygun <no.s...@localhost.localdomain> wrote:
> M.J. wrote:
> > I have a question which seems to be puzzling me as well as my
> > accountant and I'm wondering if I could canvass some other opinions!
>
> > I run a cleaning company and we occasionally carry out builder's
> > cleans i.e. we go onto a site in the final stages of construction and
> > carry out cleaning works prior to handing the project over to the
> > client.
>
> > My accountant is of the opinion that we do not need to be CIS
> > registered as we are not carrying out construction work , but we
> > recently completed a clean and were told by the subbie that we were
> > working for that he would require our CIS verification.
>
> > I contacted HMRC and they confirmed that we would need to register.
>
> > However, on receiving the CIS guide for contractors and subcontractors
> > I have had a look through the appendix which quotes the following from
> > the Finance Act 2004 Section 74
>
> > "The following operations are subject to subsection [3] ... (which I
> > take to mean 'will require those companies or individuals carrying out
> > these operations to complete CIS registration')
>
> > the relevant part for me is:
>
> > "(d) internal cleaning of buildings and structures, SO FAR AS CARRIED
> > OUT IN THE COURSE OF THEIR CONSTRUCTION, ALTERATION, REPAIR, EXTENSION
> > OR RESTORATION" (emphasis mine)
>
> > My question is; if I am cleaning windows and other parts of the
> > building internally in order to prepare the building for transfer to
> > the client is this work being carried out "in the course of (its)
> > construction, alteration, repair, extension or restoration"?
>
> > My accountant thinks not, and I am inclined to agree.
>
> I fear your inclination is indefensible, it seems blatantly obvious
> that your cleaning *is* carried out in the course of construction.
>
> It would hinge, I think, on what exactly "in the course of constuction"
> means.  One definition might be that any work which is paid for by the
> construction company on its own behalf is in the course of construction.
> Another might have it mean *during the period* delimited by when
> construction begins and ends.
>
> When does construction end?  When the job is finished and the project is
> ready to hand over to the client.  If the project is not deemed ready to
> hand over until it has been cleaned, this would suggest that the cleaning
> forms part of the construction.
>
> For it not to count as part of the construction (for it not to count as
> being carried out in the course of it), it would have to be carried out
> after completion, which I think would have to mean after the project has
> passed the client's acceptance criteria.  Do these criteria specify that
> the place should be clean?  If so, the cleaning forms part of the overall
> contruction job, and happens in the course of construction.  If not, you
> could be argued to be working for the client, not the builder, and it would
> not be in the course of contruction, but your description suggests that
> this is not what's happening.

Thanks very much for your prompt response.  What you say may well be
true, but I could argue that the construction is finished when the
building is signed off by the building regs at which point it is
deemed habitable, and ceases to be a construction site but becomes a
building in it's own right. If we are cleaning the building and not
the construction project I would say that we are not carrying out
works in the course of construction - seems to be coming down to a
question of semantics.  Nevertheless, if the building company are
carrying out cleaning works prior to this "in the course of
construction" which they will inevitably do, and my company is called
upon to provide a final 'sparkle clean' then there is a definite
distinction.  I think you are right in saying that " It would
hinge...on what exactly 'in the course of construction' means and this
is I guess a question for the revenue.

"M.J."  wrote in message 
news:f0286645-c082-45f3-8c30-a9ce37bafca0@x41g2000hsb.googlegroups.com...
> On 21 May, 17:01, Ronald Raygun <no.s...@localhost.localdomain> wrote:
>> M.J. wrote:
>> > I have a question which seems to be puzzling me as well as my
>> > accountant and I'm wondering if I could canvass some other opinions!
>>
>> > I run a cleaning company and we occasionally carry out builder's
>> > cleans i.e. we go onto a site in the final stages of construction and
>> > carry out cleaning works prior to handing the project over to the
>> > client.
>>
>> > My accountant is of the opinion that we do not need to be CIS
>> > registered as we are not carrying out construction work , but we
>> > recently completed a clean and were told by the subbie that we were
>> > working for that he would require our CIS verification.
>>
>> > I contacted HMRC and they confirmed that we would need to register.
>>
>> > However, on receiving the CIS guide for contractors and subcontractors
>> > I have had a look through the appendix which quotes the following from
>> > the Finance Act 2004 Section 74
>>
>> > "The following operations are subject to subsection [3] ... (which I
>> > take to mean 'will require those companies or individuals carrying out
>> > these operations to complete CIS registration')
>>
>> > the relevant part for me is:
>>
>> > "(d) internal cleaning of buildings and structures, SO FAR AS CARRIED
>> > OUT IN THE COURSE OF THEIR CONSTRUCTION, ALTERATION, REPAIR, EXTENSION
>> > OR RESTORATION" (emphasis mine)
>>
>> > My question is; if I am cleaning windows and other parts of the
>> > building internally in order to prepare the building for transfer to
>> > the client is this work being carried out "in the course of (its)
>> > construction, alteration, repair, extension or restoration"?
>>
>> > My accountant thinks not, and I am inclined to agree.
>>
>> I fear your inclination is indefensible, it seems blatantly obvious
>> that your cleaning *is* carried out in the course of construction.
>>
>> It would hinge, I think, on what exactly "in the course of constuction"
>> means.  One definition might be that any work which is paid for by the
>> construction company on its own behalf is in the course of construction.
>> Another might have it mean *during the period* delimited by when
>> construction begins and ends.
>>
>> When does construction end?  When the job is finished and the project is
>> ready to hand over to the client.  If the project is not deemed ready to
>> hand over until it has been cleaned, this would suggest that the cleaning
>> forms part of the construction.
>>
>> For it not to count as part of the construction (for it not to count as
>> being carried out in the course of it), it would have to be carried out
>> after completion, which I think would have to mean after the project has
>> passed the client's acceptance criteria.  Do these criteria specify that
>> the place should be clean?  If so, the cleaning forms part of the overall
>> contruction job, and happens in the course of construction.  If not, you
>> could be argued to be working for the client, not the builder, and it 
>> would
>> not be in the course of contruction, but your description suggests that
>> this is not what's happening.
>
> Thanks very much for your prompt response.  What you say may well be
> true, but I could argue that the construction is finished when the
> building is signed off by the building regs at which point it is
> deemed habitable, and ceases to be a construction site but becomes a
> building in it's own right. If we are cleaning the building and not
> the construction project I would say that we are not carrying out
> works in the course of construction - seems to be coming down to a
> question of semantics.  Nevertheless, if the building company are
> carrying out cleaning works prior to this "in the course of
> construction" which they will inevitably do, and my company is called
> upon to provide a final 'sparkle clean' then there is a definite
> distinction.  I think you are right in saying that " It would
> hinge...on what exactly 'in the course of construction' means and this
> is I guess a question for the revenue.

I'm afraid I agree with Mr. Raygun. But I would add that I think that if you 
were hired by the construction company to do the cleaning then it is part of 
the construction project, whereas if you had been hired by the end client 
(occupier) then it is not.

Mike Lewis wrote:

> I'm afraid I agree with Mr. Raygun.

You make it sound as if you don't like agreeing with me.  :-(

"M.J."  wrote in message 
news:f0286645-c082-45f3-8c30-a9ce37bafca0@x41g2000hsb.googlegroups.com...
> On 21 May, 17:01, Ronald Raygun <no.s...@localhost.localdomain> wrote:
>> M.J. wrote:
>> > I have a question which seems to be puzzling me as well as my
>> > accountant and I'm wondering if I could canvass some other opinions!
>>
>> > I run a cleaning company and we occasionally carry out builder's
>> > cleans i.e. we go onto a site in the final stages of construction and
>> > carry out cleaning works prior to handing the project over to the
>> > client.
>>
>> > My accountant is of the opinion that we do not need to be CIS
>> > registered as we are not carrying out construction work , but we
>> > recently completed a clean and were told by the subbie that we were
>> > working for that he would require our CIS verification.
>>
>> > I contacted HMRC and they confirmed that we would need to register.
>>
>> > However, on receiving the CIS guide for contractors and subcontractors
>> > I have had a look through the appendix which quotes the following from
>> > the Finance Act 2004 Section 74
>>
>> > "The following operations are subject to subsection [3] ... (which I
>> > take to mean 'will require those companies or individuals carrying out
>> > these operations to complete CIS registration')
>>
>> > the relevant part for me is:
>>
>> > "(d) internal cleaning of buildings and structures, SO FAR AS CARRIED
>> > OUT IN THE COURSE OF THEIR CONSTRUCTION, ALTERATION, REPAIR, EXTENSION
>> > OR RESTORATION" (emphasis mine)
>>
>> > My question is; if I am cleaning windows and other parts of the
>> > building internally in order to prepare the building for transfer to
>> > the client is this work being carried out "in the course of (its)
>> > construction, alteration, repair, extension or restoration"?
>>
>> > My accountant thinks not, and I am inclined to agree.
>>
>> I fear your inclination is indefensible, it seems blatantly obvious
>> that your cleaning *is* carried out in the course of construction.
>>
>> It would hinge, I think, on what exactly "in the course of constuction"
>> means.  One definition might be that any work which is paid for by the
>> construction company on its own behalf is in the course of construction.
>> Another might have it mean *during the period* delimited by when
>> construction begins and ends.
>>
>> When does construction end?  When the job is finished and the project is
>> ready to hand over to the client.  If the project is not deemed ready to
>> hand over until it has been cleaned, this would suggest that the cleaning
>> forms part of the construction.
>>
>> For it not to count as part of the construction (for it not to count as
>> being carried out in the course of it), it would have to be carried out
>> after completion, which I think would have to mean after the project has
>> passed the client's acceptance criteria.  Do these criteria specify that
>> the place should be clean?  If so, the cleaning forms part of the overall
>> contruction job, and happens in the course of construction.  If not, you
>> could be argued to be working for the client, not the builder, and it 
>> would
>> not be in the course of contruction, but your description suggests that
>> this is not what's happening.
>
> Thanks very much for your prompt response.  What you say may well be
> true, but I could argue that the construction is finished when the
> building is signed off by the building regs at which point it is
> deemed habitable, and ceases to be a construction site but becomes a
> building in it's own right. If we are cleaning the building and not
> the construction project I would say that we are not carrying out
> works in the course of construction - seems to be coming down to a
> question of semantics.  Nevertheless, if the building company are
> carrying out cleaning works prior to this "in the course of
> construction" which they will inevitably do, and my company is called
> upon to provide a final 'sparkle clean' then there is a definite
> distinction.  I think you are right in saying that " It would
> hinge...on what exactly 'in the course of construction' means and this
> is I guess a question for the revenue.

If this is a very rare scenario for you, it might be worth taking the 70% 
cash now (and any balance, subject to tax liability, in due course) rather 
than getting nothing until you are CIS-registered, and having to comply with 
all the CIS regs thereafter.


-- 
Martin

"Ronald Raygun" <no.spam@localhost.localdomain> wrote in message 
news:t1ZYj.7227$DZ6.2389@text.news.virginmedia.com...
> Mike Lewis wrote:
>
>> I'm afraid I agree with Mr. Raygun.
>
> You make it sound as if you don't like agreeing with me.  :-(

That's not it. I'm sorry I couldn't see a way out of the CIS for him.

On 21 May, 20:19, "Mike Lewis" <mike-at-
h...@deletethisbit.ntlworld.com> wrote:
> "Ronald Raygun" <no.s...@localhost.localdomain> wrote in message
>
> news:t1ZYj.7227$DZ6.2389@text.news.virginmedia.com...
>
> > Mike Lewis wrote:
>
> >> I'm afraid I agree with Mr. Raygun.
>
> > You make it sound as if you don't like agreeing with me.  :-(
>
> That's not it. I'm sorry I couldn't see a way out of the CIS for him.

Okay well it wasn't what I wanted to hear (!) but thanks very much for
your responses.