Hi,
In respect of the payment made by the landlord to a tenant or prospective tenant for any construction works, Regulation 20A came into force from 6 April 2024, where if the following conditions are met, the payment made under the construction contract cannot be a contract payment:
- the payment is made by or on behalf of the landlord (as defined in SI2005/2045 Regulation 20A(2)(b))
- the person receiving the payment is a tenant/sub-tenant or prospective tenant/sub-tenant of the landlord
- the payment is for construction operations agreed in connection with a lease or an enforceable agreement to enter into a lease
- the tenant that occupies or will occupy the property will carry out the construction operations itself, or a third person will carry out the construction operations under a contract with the tenant
- the payment is for construction operations relating to works intended primarily for the benefit and use of the tenant that occupies or will occupy the property under the lease
You can see the following guidance for further information:
CISR14048 - The Scheme: construction operations: Payments made by landlord to tenant – Regulation 20A
In respect of the tenant’s element of the payment for construction works, then this can potentially be excluded by virtue of Regulation 22 if the payment under the construction contract is in respect of premises used for the purposes of that business. You can see the guidance here:
CISR17230 - The Scheme: secondary legislation: regulation 22
However, if this is indeed the case but the £3m deemed contractor threshold is not exceeded, then there would be no expectation for you to register for CIS.
Thank you.
