Utilities and fibre work is inside the Construction Industry Scheme.
Site preparation and access works are named construction operations. So is installing systems of power supply and water supply in a building or structure. Civil engineering work is in as well, which covers the trenching, ducting and reinstatement that fills most of your week.
Scope is rarely the problem. Getting paid the right amount at the right time is.
Your client writes your invoice
Utilities and telecoms clients rarely accept your invoice. They self-bill. You apply for payment against a framework rate schedule, they decide what to certify, and they issue the payment document themselves.
You are therefore not in control of when you get paid or what for, and the paperwork proving what happened is written by the other side. Reconciling what you applied for against what was certified, then what was certified against what landed in the bank, is where the money goes missing.
It goes missing quietly. A rate applied at the wrong band. A chamber measured short. Neither is worth arguing about, which is why a contractor on a £2m framework can be down five figures a year without seeing an obvious error.
Self-billing has its own rules. There has to be a written agreement between you and the customer, it has a review date, and the customer must be VAT registered. Lapsed agreements are common on long frameworks, and documents issued under one are not valid VAT invoices.
For CIS, self-billing means the client is the contractor. They verify you, they apply the deduction, and they owe you a payment and deduction statement. Chase those every month, because without them you have no evidence of what was taken off you.
Rate-based and measured work
Framework income is priced per metre of trench, per chamber, per pole or per property passed. The rate assumes something about ground, access and reinstatement class, and the ground does not read the schedule.
Hit rock, hit an unrecorded service, or find a footway needing a higher reinstatement spec, and the tendered rate no longer covers the work. Most of it never gets claimed, because the gangs move on and nobody writes it up while fresh.
Permits, lane rental and traffic management move the same way. If they are not coded to the job that generated them, your rate analysis is fiction.
One framework, four hundred jobs
The framework is one contract. It is not one job.
Costing at framework level tells you the account is profitable or it is not, which is almost useless by then. What you need is cost by work type and by gang against the rate earned. The picture is usually uncomfortable. One work type at a good rate is carrying two others that lose money on every job, and nobody knew, because they all get paid on the same certificate.
Retention sits on top, held back across the framework and released long after the jobs that earned it are forgotten. It belongs in the accounts as a debtor while you wait.
CIS down the chain
You are the subcontractor on the framework and the contractor to everyone below. Gangs, jointing teams, drilling firms and traffic management, across several regions and dozens of payments a month.
That means verification before the first payment, deduction at the right rate, monthly CIS returns filed on the 19th and statements out. At volume that has to be a routine with records built as you go, rather than a scramble on the 18th.
Gross payment status is worth more to a utilities contractor than to almost anyone else. When the client self-bills, 20% off the top is their decision and their timing. Gross status takes it out of the conversation.
What we do
CIS end to end, in both directions, across a large subcontract base.
Gross payment status. We check whether you pass the tests and make the application, because on self-billed frameworks that 20% is your working capital.
Application to cash reconciliation. Applied against certified, certified against banked, every month, with the differences named while the evidence still exists.
Job costing across the framework, by work type and by gang rather than by client, so you see which rates are earning and which are subsidised.
Cash flow planning built around certification dates, retention releases and the gap between doing the work and the client agreeing it.
Plus the ordinary compliance. The compliance side runs alongside. Accounts, corporation tax, VAT returns, payroll and self assessment.
Who we work with
UK utilities, telecoms and fibre installation limited companies turning over between £500,000 and £5 million. Power, water, gas and multi-utility contractors, anywhere in the UK.
Common questions
Is fibre and utilities work within CIS?
The civils certainly are. Trenching, ducting, chambers and reinstatement are construction operations, as is installing systems of power or water supply in a building or structure. Purely electronic equipment inside a building is where the line gets tested.
Our client self-bills. Who deals with CIS?
They do, as the contractor. They verify you, apply the deduction, and have to give you a payment and deduction statement. Ask for any that do not arrive, because it is your evidence.
Does the VAT reverse charge apply on a self-billed payment?
It applies where the supply is within CIS and the customer is not an end user. Some utility clients are end users, because they are having work done on their own network rather than supplying construction services onward. An end user has to tell you so in writing.
Why does what we apply for never match what we get paid?
Rates applied at a different band, quantities remeasured, work held back pending evidence, and the odd item missed. Normal on frameworks and recoverable, but only if somebody reconciles every valuation rather than banking the payment.
Can we stop 20% coming off every certificate?
Only with gross payment status. We check whether you qualify and make the application, and on a framework that pays monthly it changes your cash position at once.
Book a call. Send us three months of self-billed payment certificates and the applications that went with them, and we will tell you what you applied for and never got paid.
Common questions
Does CIS apply to utilities and fibre contractors?
Utilities and fibre work is inside the Construction Industry Scheme. Site preparation and access works are named construction operations. So is installing systems of power supply and water supply in a building or structure. Civil engineering work is in as well, which covers the trenching, ducting and reinstatement that fills most of your week.
Does the VAT domestic reverse charge apply to utilities and fibre contractors?
Usually yes. The domestic reverse charge follows CIS scope. Where you supply utilities and fibre contractors 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.