CISR12050 - The Scheme: contractors: ‘deemed’ contractors
Source: gov.uk (2025-12-08)


Under the Scheme, some businesses, public bodies and other concerns are deemed to be contractors.

Sections FA04 /s59(1)(b) - (l) define those persons or bodies ‘deemed’ to be contractors within CIS and include the following
- businesses which do not include construction operations but which spend above a certain amount on construction operations.
- public bodies and other specified bodies which spend above a certain amount on construction operations.
Businesses

Only businesses are ’deemed’ to be contractors by FA04/s.59(1)(l).

A business that does not include construction operations, may be deemed a contractor if its expenditure on construction operations exceeds £3,000,000 in any 12-month rolling period, set out at FA04/s59 (l).

Whether a business is a mainstream or deemed contractor will depend on the extent to which their business involves construction work. If the business routinely undertakes construction operations as part of the carrying on of its business, then it is likely to be a mainstream contractor under FA04/s59(a).

Typically, deemed contractors will be non-construction businesses, such as large manufacturing concerns, department stores, breweries, banks, oil companies and property investors. To note, in some circumstances, the construction work undertaken by property investors may amount to property development and they would become mainstream contractors see CISR12080 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr12080).

In addition the following types of business may also fall within the deemed contractor definition (FA04/s59(1)(b));
- Utilities (gas, electricity, water etc.)
- Telecommunications
- Transport network & infrastructure
The above is intended to be helpful. It is not, and should not be read as, an exhaustive list. For more information on applying the statutory test for ‘deemed contractor status’ please see CISR12055 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr12055).

Public bodies

FA04/s59 (1) explicitly lists certain bodies and classes of body that are deemed to be contractors where they spend over a certain amount on construction operations.

They are
- any public office or department of the Crown (including any Northern Ireland department and any part of the Scottish Administration). A public office is any public body headed by a public office holder appointed by a Minister of the Crown, a government department, the Welsh Ministers, the First Minister for Wales or the Counsel General to the Welsh Government, and any part of the Scottish Administration to deliver government services
- the Corporate Officer of the House of Lords, the Corporate Officer of the House of Commons and the Scottish Parliamentary Body
- any local authority
- any development corporation or new town commission
- the Homes and Communities Agency
- the Greater London Authority in the exercise of its functions relating to housing or regeneration or its new town and urban development functions
- the Secretary of State if the contract is made by him under Section 89 of the Housing Associations Act 1985
- the Housing Corporation, a housing association, a housing trust, Scottish Homes and the Northern Ireland Housing Executive
- any NHS trust or Health and Social Services (HSS) trusts (but not including any NHS Foundation Trust)
The amount these bodies must spend on construction operations to be considered deemed contractors is set out at FA04/s59 (2). This is an expenditure of £3 million or above in any 12 month rolling period.

Regulation 22

The Scheme does not need to be applied to certain payments made by businesses brought into it by virtue of them spending £3 million or more on construction operations. The main exemption is on property used for the purposes of the business under Reg 22. This exemption to report these payments is described in much more detail at CISR15140 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr15140) and the legislation is explained at CISR17230 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr17230).

Please note, deemed contractors do not have to apply the scheme to exempt expenditure but all expenditure on construction operations (including on property used for the purposes of the business) must be included when considering whether the £3 million deemed contractor threshold is met.

Reg 22 only applies to businesses deemed to be contractors by FA04/S59(1)(l). It does not apply to public bodies and similar entities listed above s59(1) (b-k).