Most electrical firms apply CIS to every invoice or to none of them. HMRC’s position sits between the two.
Installing a new power or lighting system is a construction operation and sits inside CIS. Repairing existing wiring, or replacing a component within a system that is already there, sits outside it.
That is HMRC’s own line at CISR14090. It is the same logic they use on heating work, where soldering a leaking pipe or swapping a boiler inside an existing system falls outside the scheme, while a full new installation falls inside it.
So a rewire of a commercial unit is in. A call-out to trace a fault and replace a failed component in an existing installation is out. Same electrician, same week, different treatment.
Why the distinction costs money
If a main contractor deducts 20% from everything you invoice, some of that has probably come off work that was never in the scheme. You can get it back, but only if you can show which jobs were which.
If you pay subcontractors and you have applied CIS across the board, you have taken on verification and monthly returns you may not have owed on part of it.
And if you have gone the other way, treating the lot as outside because most of your work is fault-finding and maintenance, your new installation jobs are a live exposure.
The fix is a description on the invoice that says what the work actually was, so the treatment follows the job rather than the habit.
Testing and inspection is a different animal
EICRs, periodic inspection, PAT testing and certification are inspection work rather than installation. An EICR carried out on its own is not the installation of a system.
Where the report leads to remedial work, that work is tested on its own facts. New circuits and new distribution boards look like installation. Patching and replacing inside what is already there does not.
Firms with a large testing book often find their real CIS position is nothing like the one their contractor assumed.
Where else electricians lose money
NICEIC or NAPIT registration. Annual registration, assessment fees, scheme membership and technical publications are all deductible. So are ECS cards and 18th Edition or inspection and testing courses.
Test equipment and calibration. Multifunction testers are expensive, and calibration is an annual cost. Capital allowances on the kit, revenue deduction on the calibration. Both get missed.
The domestic and contract VAT split. Invoice a VAT-registered contractor for work inside CIS and the reverse charge applies, so you do not charge VAT. Invoice a homeowner and you charge VAT as normal, because they are an end user. A firm doing both will get this wrong on somebody’s invoice unless the system decides it rather than whoever is raising it that day.
Your van. Commercial vehicles are treated very differently to cars for tax. If you have a van and are being taxed as though it were a company car, that is an expensive mistake and a fixable one.
Materials on account. Wholesaler accounts, cable sitting on the van, kit bought for jobs not yet invoiced. All of it distorts your margin if it is not handled properly.
What we do
CIS handled job by job, with the installation and repair distinction applied rather than ignored.
Reclaim deductions taken from work that was outside the scheme in the first place.
VAT set up so the reverse charge applies itself on contract work and stays off domestic work.
Job costing that separates installation contracts from testing and reactive work, so you can see which of them pays.
Underneath it all, the usual. We do the ordinary work too. Year end accounts, corporation tax, VAT, payroll and self assessment.
Who we work with
UK electrical contracting limited companies turning over between £500,000 and £5 million, anywhere in the country.
Common questions
Do electricians need to register for CIS?
If you install new power or lighting systems, or you pay subcontractors who do, yes. If your work is entirely repair inside existing installations for homeowners, often not. Most firms of any size do both.
Is a rewire inside CIS?
A full rewire is the installation of a system, so it sits inside the scheme.
Is a fault repair inside CIS?
Generally not, where you are repairing or replacing inside an installation that already exists. HMRC treats it the same way as soldering a leaking pipe.
Does the reverse charge apply to my invoices?
On CIS work billed to a VAT-registered contractor who is not the end user, yes. On domestic work for a homeowner, no.
Can I claim NICEIC registration and tester calibration?
Yes. Registration, assessment, calibration and training are all deductible business costs.
Book a call. Bring the last twelve months of invoices and we will tell you which jobs sat inside CIS and what you can claim back.
Common questions
Does CIS apply to electricians?
Installing a new power or lighting system is a construction operation and sits inside CIS. Repairing existing wiring, or replacing a component within a system that is already there, sits outside it. That is HMRC’s own line at CISR14090.
Does the VAT domestic reverse charge apply to electricians?
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.