CIS deductions in ECO

Hi there, I’m having a little trouble with the application of CIS deductions in the Eco industry. I am the Finance Manager for an eco installer. We install energy saving measures in domestic properties across the UK. We make the appropriate CIS deduction from our labourers and prior to us achieving Gross status we were subject to CIS deductions from our funders when we submit our jobs for payment. Our funders (the energy companies) pay us a rate per ABS score for each property where we install energy saving measures. So based on the size and type of the property, it’s pre main heating source and then the measures we install, there will be a jump in SAP band for the property before the install and after. and this jump will determine the ABS score. We are essentially trading carbon. We will sign a contract for a certain amount of ABS with each of our funders for the year and we are then obligated to deliver this amount of carbon by carrying out these installations. So to me the CIS still applies as there are construction works involved. The issue I’m having is we are acting as a managing agent for some installers like ourselves who aren’t fortunate enough to have secured their own funding. They have their own jobs and installers and will complete the job and just deliver through us to one of our funders. We get paid as we normally would do and we pay them, taking off a small fee. Essentially acting as a managing agent. On previous guidance from HMRC I am making CIS deductions from these payments to the sub installers. Which I believe to be correct as if they aren’t gross status and were submitting directly to the utility companies themselves, they would be subject to CIS deductions. I get resistance on this every month with every sub installer and just needed to confirm once and for all that my understanding is correct and that I’m applying the cis rules and guidance correctly. I think part of the problem could be that these companies are smaller than us and have never had a contract in place direct with utility companies and they keep coming back to me with “we are just trading carbon” One last week sent me a link to section 6.17 of CIS340 on managing agents. However this reads as though it is referring to property letting rather than a generalisation of acting as a managing agent in different scenarios. Am I correct on this? I’d be grateful for any input on this as it seems to be a bit of a grey area within the industry. Thanks in advance Laura

Hi Laura,
Hi we would need something in writing with full employment details as this could fall within the realms of scope of CIS so we will require further information to determine the businesses status. If you can also send copies of any contracts or employment agreements that may be in your possession to aid the determination.
If you require any further details regarding CIS scope you can call the CIS helpline (TEL:0300 200 3210).
Thank you.