CISR14180 - The Scheme: construction operations: improvement and housing grants

Improvement or housing grants are payments awarded under statutory arrangements to property occupiers for the improvement of their properties. They are normally administered by local authorities.

One arrangement is that the applicant, having been awarded a grant, engages a construction concern to execute the work and then seeks reimbursement from the local authority. A variant of this is that the applicant arranges for the work to be done but passes payment invoices received from the builder to the local authority for payment out of the grant.

In each of these cases the applicant commissions the work so they are the 'contractor'. Where the applicant is a council tenant the Local authority is also a party the grant application. In this case the local authority stands as the contractor and the CIS applies to any payments made under the contract. Commonly, however, the applicant is a private householder and so is not a contractor for the purposes of the Scheme. For that reason CIS does not apply whether payment is made to the builder by the householder or by the local authority. Where payment is made by the local authority out of the grant it does so as an agent or representative of the grant applicant, not as the contracting party.