Routine drain clearance is outside the Construction Industry Scheme. Installing, repairing or relaying a drain is inside it.
HMRC’s own guidance excludes the routine clearance of gutters and sewage pipes from the scheme. But the legislation names the installation of systems of drainage, water supply and sanitation in a building or structure as a construction operation, so the moment you stop cleaning a drain and start rebuilding one, you have crossed the line.
Almost every firm in this trade does both, often on the same site in the same week. That is where the money goes missing.
Which side of the line the work sits on
Outside the scheme: jetting a blocked run, routine gutter and pipe clearance, planned maintenance cleaning on a schedule.
Inside the scheme: excavating and relaying a collapsed run, installing new drainage on a build, connecting to a sewer, new soakaways, manhole and chamber work, drainage as part of groundworks.
The awkward cases are in the middle. A no-dig lining repair is a repair to a drain rather than a clean, and on the ordinary reading it looks like a construction operation. Root cutting to clear a blockage looks like clearance. A job that starts as an emergency unblock and turns into a patch repair changes character partway through.
Why the invoice matters more than the argument
A main contractor looking at a line saying “drainage works, £6,400” will apply CIS to the whole thing, because they carry the risk if they get it wrong and they are not going to take your word for the split.
So split it yourself, on the invoice, at the point you raise it. Clearance and jetting on one line, excavation and relay on another. That is a five minute job when you raise the invoice and a very long conversation eighteen months later.
The same logic runs the other way. If you subcontract the digging to a groundworker, you are operating as a contractor on that payment even if most of your business is cleaning. That means verification, deductions and a monthly return by the 19th.
Emergency work and contract work are two different businesses
Callout work is priced on availability at eleven at night and usually paid quickly. Planned contract work is priced competitively, invoiced on application, and paid slowly, sometimes with retention held against it.
Most drainage firms run both through one profit and loss account and report a single margin. When we separate them, the split is almost never what the owner assumed, and it usually changes how the callout rate is set.
Insurance and home emergency network work is a third category again. Fixed schedules of rates, volume, and payment terms set by somebody else. Worth knowing whether it is carrying the business or subsidised by the rest of it.
CCTV surveys and reports
Survey income behaves differently to remedial income. A survey with a written report, invoiced on its own, may sit outside CIS. Where it is bundled into a repair invoice, it will not.
It is also usually your highest margin work and the easiest to under-price, because the equipment is already in the van and the time looks free.
Jetters, tankers and vans
The kit in this trade is expensive and the tax relief on it is worth getting right. Jet vac units, tankers, CCTV crawlers, jetting trailers and commercial vans are all plant and machinery, and the annual investment allowance normally covers the lot in the year you buy them. Cars are treated differently and get a lot less.
Buying on hire purchase does not change the relief. The allowance is generally available on the full cost once the asset is in use, even though you are paying monthly for the next four years. Firms that assume they only get relief on the payments they have made are understating their claim.
What we do
Work out which of your jobs are inside CIS and which are not, then set your invoice templates up so the split is on the paperwork.
Run CIS both ways. Verification, deductions, monthly returns, statements, and reclaiming deductions taken from you.
Separate reporting for callout, contract and survey work, so you can see which one is actually paying for the yard.
Capital allowances claimed properly on vehicles and jetting equipment, including assets on finance.
Cash flow planning around slow-paying contract work and fast-paying reactive work.
Underneath it all, the usual. Year end accounts, corporation tax, VAT, payroll and self assessment.
Who we work with
UK drainage and utility limited companies turning over between £500,000 and £5 million, anywhere in the country.
Common questions
Is drain clearance within CIS?
No. HMRC’s guidance treats routine clearance of gutters and sewage pipes as outside the scheme.
Is drain repair within CIS?
Yes. Installing, repairing or relaying drainage is a construction operation.
A contractor is deducting CIS from my jetting invoices. Is that right?
Not for clearance work. Split the invoice so the clearance element is visible, and challenge deductions taken on it.
Do I need to register as a contractor if I use a groundworker?
If you pay a subcontractor for construction work, yes. Cleaning firms get caught by this regularly.
Does the VAT reverse charge apply to drainage work?
It follows CIS. Work inside the scheme for a VAT registered contractor who is not the end user falls under the reverse charge. Clearance work for a homeowner does not.
Book a call. Bring three recent invoices, a clearance job, a repair job and a mixed one, and we will tell you which parts of them are inside CIS and how they should be billed.
Common questions
Does CIS apply to drainage contractors?
Routine drain clearance is outside the Construction Industry Scheme. Installing, repairing or relaying a drain is inside it. HMRC’s own guidance excludes the routine clearance of gutters and sewage pipes from the scheme.
Does the VAT domestic reverse charge apply to drainage contractors?
It follows the CIS answer above. Where the work falls inside CIS and your customer is VAT registered, registered under CIS and is not an end user, the reverse charge applies and you do not charge VAT. Where the work falls outside CIS, or the customer is an end user or a homeowner, you charge VAT as normal. Two jobs in the same week can be treated differently.