Plastering and drylining are alteration and repair, so they are inside CIS — and because the work is labour-heavy the deduction base is close to your whole invoice. Which is exactly why gross payment status is worth more to a plasterer than to almost anyone.
Plasterers · CIS scope
Plastering, rendering, screeding and drylining are alteration and repair of a building or structure, so they sit inside the Construction Industry Scheme without argument. What makes this trade different is not scope — it is the shape of the invoice.
On a materials-heavy trade the list of exclusions does real work. On a plastering invoice, where the value is overwhelmingly labour and the bagged materials are frequently supplied by the main contractor, there is almost nothing to take out. So close to 100% of your turnover has 20% held back from it, and you wait until after the year end to see it again.
That arithmetic is why a plasterer's cash position is harder than the turnover suggests. Two things change it: gross payment status, which removes the deduction; and, if you trade through a company, running a real payroll so the offset happens monthly through the Employer Payment Summary rather than accumulating until 5 April.
Drylining, partitioning and suspended ceilings are alteration of a building and are inside the scheme. The caveat is the manufacture exclusion: making up partition systems in a workshop and delivering them for somebody else to fit would be outside CIS, because section 74(3) excludes the manufacture of building components and their delivery to site. Fitting on site is inside it.
The deduction is charged on the payment less materials you directly incurred, consumable stores, fuel other than fuel for travelling, plant hire, the cost of manufacture or prefabrication, and the VAT you charged. Travel and subsistence stay in. And where the contractor buys the materials and recharges them, you have not directly incurred them, so no reduction is due at all.
If the deduction is costing you cash, gross payment status is the fix rather than a workaround — the turnover test is £30,000 of relevant payments net of VAT and materials for a sole trader, and the compliance test, which since 6 April 2024 includes VAT, is the part that needs preparing for.
It matters, and not in your favour. Materials only reduce the deduction base where you directly incurred the cost. If the contractor buys the bags and you turn up and work, you have not directly incurred them and no reduction is due — so the deduction is charged on your whole invoice. It is a legitimate way to work and it saves you funding the merchant account, but it should be a decision made knowing it costs you a larger deduction, for longer.
Because the benefit is proportional to how much of your invoice is exposed. A roofer with half the invoice in tiles has already halved the base. A plasterer usually has not reduced it at all. So the same 20% deduction takes twice as much of your turnover, and removing it is worth twice as much. On £120,000 of labour-only plastering, gross payment status is roughly £24,000 that stops being held by HMRC until after 5 April — and the turnover test to qualify is only £30,000 net of VAT and materials.
Travel and subsistence sit inside the payment subject to deduction — they are not excluded like materials or plant hire. So a mileage line has the full 20% taken off it, which means tax is being deducted from a reimbursement of cost rather than from profit. That is correct under CIS 340 rather than an error, but it is worth seeing the number. On £400 of recharged mileage in a month the deduction is £80, and none of it comes back until after the tax year ends — which for a business covering a wide patch is a real annual sum.
For CIS, no — both are alteration of a building and inside the scheme. The distinction that does exist is between fitting and manufacturing: making components in a workshop and delivering them is excluded by section 74(3), while installing them on site is a construction operation. For a business that does both, the treatment follows what each contract is for. Boarding, taping and skimming on site are all alteration of a building; cutting boards to size in a yard for someone else to fix is the manufacture exclusion.
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