HMRC has recently updated its guidance in the Construction Industry Manual, confirming that traffic management services will come within the scope of the Construction Industry Scheme (CIS) in certain circumstances starting from March 2025.
This change could have significant implications for businesses involved in providing or utilising traffic management services as part of construction operations. At Dains, we’re here to help you navigate these changes and ensure your business remains compliant while managing any impact on cash flow.
What’s Changing?
From March 2025, certain traffic management services will fall under the scope of CIS.
What’s Included?
Traffic management services will now fall within CIS if they directly support construction operations. Examples include:
Setting up and managing traffic systems for a contractor engaged in roadworks or highway maintenance
Installing temporary traffic lights or road signage for construction work
Placing barriers or cones to create a safe working area for a construction project
Providing ongoing traffic monitoring services during the lifespan of a construction project
Installing pedestrian diversions or crossings to accommodate construction-related road closures
What’s Excluded?
Services unrelated to construction operations
Example: Providing barriers for an event like the Notting Hill CarnivalDelivery-only services
Example: Supplying traffic management equipment to a construction site but not installing it
What Does This Mean for Your Business?
Whether you provide or use traffic management services, these changes may affect your obligations under CIS:
For Providers of Traffic Management Services
You’ll need to assess whether the services you provide will fall under CIS
If so, you may face CIS deductions, impacting your cash flow
To minimise the impact, consider:
Registering with HMRC as a subcontractor
Applying for gross payment status, which can reduce deductions
For Contractors Using Traffic Management Services
You’ll need to ensure you apply CIS rules to payments made to suppliers who fall within the scope of the scheme. You will also have to report any payments made to subcontractors, and deductions taken, within the scope of CIS to HMRC monthly plus remit the deductions to HMRC
Example: If you hire a traffic management company to set up temporary traffic lights and barriers for a road repair project, you must deduct CIS tax (at the appropriate rate) from your payment to the supplier unless they have gross payment status. This ensures compliance with HMRC's requirements and avoids potential penalties for incorrect processing
How Dains Can Help
At Dains, we have extensive experience guiding clients through the complexities of CIS compliance. Our Employment Services team can:
Help you determine whether your services or payments fall under the updated rules
Support you in registering with HMRC or applying for gross payment status
Provide tailored advice to manage cash flow impacts and ensure compliance
