Painting internal or external surfaces is a construction operation. Signwriting is not, and nor is a mural. Labour-heavy work also means the deduction base is close to the whole invoice — which is why gross payment status matters most here.
Section 74(2) of the Finance Act 2004 lists the painting or decorating of the internal or external surfaces of any building or structure as a construction operation in its own right — new or existing, standalone or part of a larger job. So a decorating business is inside CIS on almost all of its work.
Two exclusions in section 74(3) matter to this trade specifically. Signwriting, and the erection or installation of signboards and advertisements, is excluded. And the making, installing and repairing of artistic works — sculptures, murals and other wholly artistic works — is excluded too.
Which produces a genuinely odd-looking but perfectly clear result: painting a wall is inside the scheme, and hand-lettering a sign or painting a mural on the same wall is outside it.
Whether a job is a construction operation decides two things at once, not one. It decides whether the payment is inside CIS — and because the VAT domestic reverse charge takes its scope from the CIS definition, it decides the VAT treatment on the same invoice. Get the scope question wrong and you get both wrong together.
Internal cleaning of buildings and structures carried out in the course of their construction, alteration, repair, extension or restoration is inside the scheme. CIS 340 treats routine cleaning of existing commercial or industrial premises as outside it. So the builders' clean at the end of a refurbishment is a construction operation, and the weekly office clean is not — even where the same people do both for the same customer.
CIS 340 also treats as outside the scheme: running a canteen, hostel or site facilities; medical, safety or security services; and reverse premiums or landlord inducements.
Decorating tends to be labour-heavy, which means the deduction base is close to the whole invoice and there is less room to reduce it than in a materials-heavy trade. Paint, sundries and coverings you buy yourself do come out — you must have directly incurred them, so materials the contractor supplies or recharges give no reduction. So do consumable stores, plant hire, fuel other than fuel for travelling, and the VAT you have charged.
Travel and subsistence do not. On a trade that moves between sites constantly, this is the line worth checking on your own invoices first — a mileage or subsistence line has the full deduction taken off it, and nothing in the system flags that as wrong.
Because the base is close to 100% of turnover for a labour-only decorator, this is also the trade where gross payment status makes the largest proportional difference. The turnover test needs £30,000 of relevant payments in the 12 months before applying, net of VAT and materials — a low bar for a full-time business — and the compliance test, which now includes VAT, is the part that needs preparing for.
Decorating in the course of constructing a new dwelling, before completion, can be zero-rated. Decorating an existing occupied dwelling is standard rated at 20%. Conversions can be 5% — where the number of single household dwellings changes, where premises never used residentially (or not for ten years or more) are converted, or where a dwelling empty for two years or more is renovated. Zero-rated supplies are outside the reverse charge; the other two are not.
Yes. Section 74(2) expressly lists the painting or decorating of the internal or external surfaces of any building or structure as a construction operation. It does not matter whether the building is new or existing, or whether the work is part of a larger project — painting is in the scheme in its own right. That applies to a subcontract decorating invoice to a main contractor as much as to a decorator engaged directly by a developer, and it is why so many painters find 20% coming off payments they assumed were outside any scheme.
Because section 74(3) expressly excludes signwriting, and the erection or installation of signboards and advertisements. It also excludes the making, installing and repairing of artistic works — sculptures, murals and other wholly artistic works. So a decorator painting a wall is inside CIS and the same decorator painting a hand-lettered sign or a mural on it is not. That is on the face of the statute rather than a matter of degree. The practical consequence is that a decorator invoicing both on one job has two treatments to keep apart, for CIS and for the reverse charge.
It depends what is being cleaned and why. Internal cleaning of buildings and structures carried out in the course of their construction, alteration, repair, extension or restoration is inside the scheme. Routine cleaning of existing commercial or industrial premises is outside it. So a builders' clean at the end of a job is a construction operation; a weekly office clean is not, even if the same people do both. Running a canteen, a site hostel or site facilities is outside the scheme too, as are medical, safety and security services.
Yes. Decorating in the course of constructing a new dwelling can be zero-rated, before completion. Decorating an existing occupied dwelling is standard rated at 20%, because it is repair, maintenance or alteration. Conversions can attract 5% — a changed number of dwellings, a non-residential to residential conversion, or renovating a dwelling that has been empty for two years or more. And zero-rated supplies are outside the reverse charge entirely. So the same decorator can be zero-rated with no reverse charge on Monday and standard-rated with the reverse charge applying on Tuesday, on two sites for the same contractor.
Three months of statements or returns, and a straight account of what is wrong and what it is costing.
One short email: what has changed in CIS and construction VAT, the dates coming up, and one number worth checking on your own invoices. No spam, unsubscribe any time.