Accountants for Pest Control Companies

Pest control is outside the Construction Industry Scheme.

The scheme applies to construction operations, and construction operations are defined by a list in the Finance Act 2004. Pest control does not appear anywhere on that list. It is not building work, and it is not an alteration or repair of a structure.

Being straight with you about the basis for that: this is a reading of the legislation rather than a named exclusion. HMRC has published carve-outs for things like security system installation and carpet fitting, and pest control is not written into those either. It sits outside because it never came inside.

So if a main contractor is running your invoices through CIS and taking 20% off, they have applied the scheme to work it was never meant to catch. That is worth a conversation with them, and worth reclaiming.

Where a pest control firm can still get pulled in

The work itself stays outside. What can change the picture is what else your team does on site.

Proofing and physical works. Bird netting, mesh, wire, sealing entry points into the fabric of a building. If that starts to look like alteration or repair of the structure rather than treatment, the position needs looking at job by job.

Sitting under a main contractor on a construction project. Pre-demolition surveys, site clearance work, treatment as part of a refurbishment package. Contractors on live sites tend to apply CIS across every subcontractor invoice by default, because it is easier for them than deciding.

The second one is where most disputes start, and it is usually resolved by an email showing what the invoice actually covers.

Annual contracts, and the accounting mistake that comes with them

Most pest control businesses run on contract income. A customer pays for twelve months of cover up front, and you deliver visits across the year.

That money is not all this year’s revenue at the point it lands. The portion covering months you have not serviced yet is deferred income, and it belongs on the balance sheet as a liability until you have done the work.

Get that wrong and two things happen. Your profit looks better than it is in the month the contracts renew, and worse in the months you are delivering against them. Corporation tax gets calculated on a figure that was never right.

We see this handled badly more often than any other issue in recurring revenue businesses. It is not complicated to fix, but it does have to be built into how the bookkeeping runs rather than corrected once a year at accounts stage.

The related question is margin. Contract income and reactive callout income behave very differently. Contracts are predictable and easier to route efficiently. Callouts pay more per visit and cost more to service, because the van is going where the job is rather than where the round is. Most firms have never separated the two in their reporting and have a strong opinion about which pays better that turns out to be wrong.

Vehicles, equipment and licensing

Vans and cars. Commercial vehicles get capital allowances treatment that cars do not. A pest control fleet is usually all vans, which is good news, but the treatment depends on the vehicle and how it is owned.

Equipment. Fogging and misting gear, bait stations, thermal and monitoring kit, detection cameras. Capital allowances apply, and firms buying steadily through the year often under-claim because the spend is spread across small invoices.

Licensing and training. RSPH qualifications, BPCA membership, CRRU certification for rodenticide use, refresher training and safe storage requirements. All of it is a cost of being allowed to trade and all of it is deductible.

Waste and disposal. Controlled waste routes, disposal contracts and the record keeping that sits behind them.

What we do

Check whether CIS has been applied to your invoices when it should not have been, and get deductions back where a contractor has taken them.

Deferred income handled properly across your contract book, so the profit figure you look at each month is real.

Reporting that splits contract income from reactive work, so you can see which one is carrying the business.

Capital allowances claimed across vehicles and equipment rather than picked up in a rush at year end.

Everything else you would expect as well. Year end accounts, corporation tax, VAT, payroll and self assessment.

Who we work with

We are construction accountants, so the pest control firms we fit best are the ones working on construction sites and for main contractors, developers, housing associations and facilities managers. If most of your income comes from domestic call-outs, another practice may suit you better, and we will say so on the call rather than after you have signed.

UK limited companies turning over between £500,000 and £5 million.

Common questions

Do pest control companies need to register for CIS?
For pest control work, no. It is not a construction operation. If you also carry out proofing or building works that alter the structure, that element needs checking separately.

A main contractor is deducting 20% from our invoices. Can they?
Not for pest control treatment. Ask them what construction operation they believe they are deducting against.

Can we get back CIS that has already been taken?
Usually yes, through your corporation tax return or an in-year repayment claim.

Does the VAT reverse charge apply to us?
It follows CIS scope. Work outside the scheme is outside the reverse charge, so you charge VAT as normal.

How should annual contracts paid up front be treated?
Recognise the income across the months you deliver the service. The unserviced portion is deferred income and sits on the balance sheet.

Book a call. If a contractor has been taking CIS off your invoices, we will tell you whether they were entitled to and what you can claim back.

Book a call