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the UK

Cost control on the UK construction

What governs valuation, variation, retention and the reporting of cost against value.

12 authorities, 7 statutory, 11 free to read.

StatutoryFree to read

Construction Industry Scheme (Finance Act 2004 Part 3 Chapter 3 and the Income Tax (Construction Industry Scheme) Regulations 2005, SI 2005/2045)

HM Revenue and Customs

subcontractor verificationdeduction ratesmonthly returns and statementsgross payment statusmaterials exclusion

StatutoryFree to readas amended

Finance Act 2004, Part 3 Chapter 3 (Construction Industry Scheme), sections 57 to 77 and Schedules 11 and 12

UK Parliament (legislation.gov.uk)

the Construction Industry Schemeduty to deduct from contract paymentsexclusion of the direct cost of materialsregistration for gross payment and for payment under deductiondefinition of construction operations and of contractor and subcontractor

StatutoryFree to readas amended

Income Tax (Construction Industry Scheme) Regulations 2005 (SI 2005/2045)

UK Parliament (legislation.gov.uk)

monthly contractor returnsthe payment and deduction statement and its deadlinesubcontractor verificationpayment of deductions to HMRC

StatutoryFree to readas amended

Late Payment of Commercial Debts (Interest) Act 1998, with the Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 (SI 2002/1675)

UK Parliament (legislation.gov.uk)

statutory interest on late commercial debtsfixed compensation for recovery costssubstantial remedy test for contractual interest clauses

Applies only between businesses, so it belongs on the subcontract invoice and not on the domestic one. It is the only leverage a small contractor has on a slow-paying main contractor that does not require adjudication.

StatutoryFree to readas amended, consolidated text on legislation.gov.uk

Value Added Tax Act 1994

UK Parliament (legislation.gov.uk)

VAT liability on construction suppliesthe domestic reverse charge powerzero and reduced rating for dwellingsrecord keeping and invoicing obligations

StatutoryFree to readas amended

Value Added Tax Regulations 1995 (SI 1995/2518)

UK Parliament (legislation.gov.uk)

contents of a VAT invoicetime limit for providing a VAT invoicesimplified and modified invoicesreverse charge and margin scheme references on invoices

This is the single most load-bearing authority for the invoice template. Every mandatory field on a GB invoice traces to regulation 14 and nowhere else.

StatutoryFree to read

VAT domestic reverse charge for building and construction services (VATA 1994 s.55A and the Value Added Tax (Section 55A) (Specified Services and Excepted Supplies) Order 2019)

HM Revenue and Customs

VAT treatment of B2B construction suppliesinvoice wordingend user and intermediary supplier notifications

A UK construction invoice template that always adds VAT to the total is wrong for most business-to-business supplies in this market, and the error compounds across every application.

De facto standardFree to readcurrent online edition

CIS 340: Construction Industry Scheme, a guide for contractors and subcontractors

HM Revenue and Customs

practical operation of the Construction Industry Schemededuction rateswhat is excluded from the deduction basedeemed contractor thresholdreturn and payment deadlines

The practical companion to the legislation and the source most contractors will actually be shown. Its paragraph numbering is stable enough to cite and it is free to reproduce facts from.

De facto standardPaywalled

RICS professional statements and guidance on cost reporting and interim valuation

RICS

cost reportingvaluationfinal account

A UK cost report has a fixed anatomy and a client reads it in that order. Ours prints a cost position with no such structure, which is exactly the workbook problem in a different discipline.

De facto standardFree to readcurrent online edition; charge effective for tax points from 1 March 2021

VAT domestic reverse charge for building and construction services (guidance and technical guide, VAT Notice 735 material)

HM Revenue and Customs

scope of the construction domestic reverse chargeinvoice wording for the reverse chargeend user and intermediary supplier notificationsthe five per cent disregardtreatment of mixed supplies

HMRC guidance rather than legislation, but it is free, openly licensed and is the only place the practical invoice wording and the end user notification mechanism are set out. A construction canon that omits it cannot produce a correct subcontract invoice.

De facto standardFree to readcurrent online edition

VAT Notice 708: buildings and construction

HM Revenue and Customs

zero rating of new dwellingsreduced rating of conversions and empty property renovationcertificates for relevant residential and charitable usetax point rules for construction services and stage payments

Determines whether a domestic contractor charges twenty per cent, five per cent or nothing on a residential job. Getting it wrong either loses the contractor the difference or hands the customer a price they will not pay.

De facto standardFree to readcurrent online edition

VAT registration, record keeping and the VAT guide (Notice 700 series)

HM Revenue and Customs

VAT registration and deregistration thresholdsVAT record keeping and retentiongeneral invoicing practice

Needed for the registration threshold rule and to settle the record retention period that is currently a must_verify. Also the fallback source for anything in regulation 14 that needs practical interpretation.

The rest of the the UK register

Code compliance Contract administration Quantity surveying Document control All of the United Kingdom

The register tells you what. The back office does it.

AEC Stack carries the registrations, the insurance certificates, the payment notices and their deadlines, and the documents a buyer wants before they let you start. Across Canada, built deepest for Ontario.

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