CISR12090 - The Scheme: contractors: local authorities
CIS uses the definitions of local authorities set out at ICTA88/s842A.
They include
- metropolitan, county, borough and district councils
- police and fire authorities
- parish, community and local councils.
This list is not exhaustive.
Local authorities are only required to operate CIS if their expenditure on construction operations exceeds the limits described in CISR12050. In practice, most local authorities of any size will exceed those limits. You should note that Local Authorities are not able to make use of the provisions of SI2005/2045 reg 22, known as the 'Own build' regulation. This is because Regulation 22 specifically relates to 'businesses' of the type described at FA04/s59 (1)(l). (See CISR15140 for more information about Regulation 22).
CIS administration
The CIS system relies on interaction with other HMRC systems for maintenance of its records. The essential requirements for maintenance of a CIS record for a contractor are the existence of
- a record on the SA or COTAX system
- a BROCS reference relating to a P(SC) or XP scheme.
Since most local authorities have been operating the previous Schemes for many years there will already be a P(SC) scheme in operation for the authority's employees and Net Payment status subcontractors. There will be a BROCS reference in existence and this scheme will continue to be managed by the Employers Section currently responsible.
However, the programme of allocating UTRs when the COTAX and SA systems were set up did not cover local authorities. Special arrangements have been made, therefore, to allocate UTRs centrally. This has been done by South Wales Area (Service), formerly PD2, which has set up SA records for all known local authorities. When this was done the assigned UTR was reported to the relevant Employers Section and that office will be responsible for managing the CIS record.
Any changes to designatory details affecting the SA record must be reported to South Wales Area (Service). The latter will make the necessary changes to that record and these will feed through to the CIS record.
If you are in an Employers Section and you are approached in connection with the creation of a new local authority, or the reorganisation of existing local authorities for which you manage one or more of the schemes, you should liaise with South Wales Area (Service) to ensure that the necessary records are created and/or ceased.
