Shopfitting is inside the Construction Industry Scheme. HMRC names it directly, alongside fitted furniture such as kitchens, bathrooms and cupboards, where the work forms part of the construction, alteration, extension or repair of a building.
The complication is that your business sits on both sides of the line at once. Manufacturing components off site is excluded from the scheme by statute. Fixing them into a building is not. Almost every shopfitting contract you take on contains both.
Your workshop and your site work are treated differently
A £90,000 fit-out where you build the units in your own workshop and then send four fitters in for a fortnight is not one thing for CIS purposes. The manufacture sits outside the scheme. The installation sits inside it.
Contractors deduct on what the paperwork says. A single line reading “shopfit works, £90,000” invites a 20% deduction across the lot, including a workshop element that was never in scope. Deductions also come off the labour figure after materials are taken out, so the material content of a manufactured unit needs to be visible on the invoice rather than buried in a lump sum.
Splitting the invoice on its own does not settle it. Where one contract covers the manufacture and the installation together, the mixed contract rule can pull the whole payment into the scheme, workshop element included. What decides the treatment is how the work is contracted, not how the invoice is laid out afterwards. That is a conversation to have before you sign, not after the first application for payment goes in.
Fixed seating is the odd one out
Installing seating is excluded from CIS by statute, along with blinds and shutters. So on a restaurant or cinema fit-out, the fixed seating element may fall outside the scheme even though everything around it is inside it.
Worth identifying at quote stage. It is easier to price and invoice it as a separate element from the start than to unpick it from a contractor’s payment notice.
Where fit-out money goes missing in the accounts
Work in progress. You can finish a year end with £60,000 of made units racked in the workshop, paid for in timber and labour, not yet fitted and not yet invoiced. Leave that out of your figures and you have understated both your profit and your balance sheet. Guess at it and you may be paying corporation tax on work you have not been paid for. This needs tracking through the year rather than reconstructing in the week before the accounts are due.
Deposits and stage payments. A deposit taken to cover material purchase is money you owe work against. It is not turnover on the day it clears. Fit-out contracts run on stage payments and applications, and the gap between what you have banked and what you have actually earned is where shopfitters most often misread their own position.
Retention. Usually held for twelve months after practical completion. It is income the moment the work is done, so you pay tax on it long before you see it, and a chunk of it is never chased. On a run of fit-outs, unrecovered retention adds up to a real number.
What we do
CIS applied properly across manufacture and installation, with the contracting set up so the treatment follows the work.
Work in progress and stock valued on a system that runs all year.
Deposits, applications, stage payments and retention posted so your management figures show earned revenue rather than cash movement.
Job costing that separates workshop hours from site hours, so you can see which contracts are actually paying and which are being carried by the rest.
The routine work sits underneath all of that. Plus year end accounts, corporation tax, VAT returns, payroll and self assessment.
Who we work with
UK shopfitting and fit-out limited companies turning over between £500,000 and £5 million, anywhere in the country.
Common questions
Is shopfitting inside CIS?
Yes, where it forms part of the construction, alteration, extension or repair of a building. HMRC lists shopfitting alongside fitted kitchens, bathrooms and cupboards.
Is making units in my workshop inside the scheme?
No. Off-site manufacture of components, and delivery of them to site, are excluded. The installation is the part that falls inside.
Can I split my invoice to keep the workshop element out of CIS?
Not on its own. Where a single contract covers both, the mixed contract rule can bring the whole payment into the scheme.
Is fixed seating inside CIS?
No. Installing seating is excluded by statute, as is the installation of blinds and shutters.
When does a customer deposit become turnover?
When you have done the work it relates to. Until then it belongs on the balance sheet, not in your profit figure.
Book a call. Send us a live fit-out contract and a recent application for payment, and we will tell you what a contractor is entitled to deduct and what they are not.
Common questions
Does CIS apply to shopfitters?
Shopfitting is inside the Construction Industry Scheme. HMRC names it directly, alongside fitted furniture such as kitchens, bathrooms and cupboards, where the work forms part of the construction, alteration, extension or repair of a building. The complication is that your business sits on both sides of the line at once. Manufacturing components off site is excluded from the scheme by statute.
Does the VAT domestic reverse charge apply to shopfitters?
Usually yes. The domestic reverse charge follows CIS scope. Where you supply shopfitters work that falls inside CIS to a customer who is VAT registered, registered under CIS and is not an end user, you do not charge VAT on the invoice. Your customer accounts for it instead. Supplies to homeowners and to end users stay outside it, and you charge VAT the normal way.