CIS accounting

Specialist accountants for drainage contractors.

Drainage contractors work across one of the most clearly defined areas of CIS. Installation, repair and maintenance of drainage systems are listed construction operations under s.74(2) Finance Act 2004. Whether you are laying new drainage on a housing development, carrying out CCTV surveys ahead of remediation, or undertaking utilities-adjacent pipework, the CIS deduction applies to your labour income. The allowable expense pool is substantial: drainage pipe, chambers and materials should be excluded from the deduction base, and the capital cost of CCTV survey equipment, jetting vehicles and specialist plant qualifies for capital allowances.

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20%

Deducted on labour by main contractors

~£2,000

Average first-year CIS refund (illustrative)

£30,000

GPS turnover threshold (net of materials)

The specific challenges

What makes drainage contractors accounting different.

Drainage pipes, chambers and materials excluded from deductions

CIS deductions apply only to the labour element of a drainage invoice. Drainage pipes, inspection chambers, gullies, backfill aggregate, geotextile and other materials you supply are excluded from the deduction base. Drainage work is typically highly materials-intensive, so the split between labour and materials can be significant. If your main contractor applies the 20% rate to the full invoice value rather than the labour element, the overpayment compounds across a full year of contracts.

CCTV survey and jetting equipment: capital allowances opportunity

CCTV drainage inspection cameras, push-rod and crawler units, recording equipment and jetting vehicles are plant and machinery eligible for capital allowances. The Annual Investment Allowance provides a 100% first-year deduction on qualifying equipment purchases up to £1 million. These are significant capital costs for a drainage contractor and are frequently under-claimed, particularly when the equipment is purchased through a finance agreement rather than outright.

Utilities work: scope nuances

Drainage work close to or within utility easements can sit across a boundary. Work on private drainage systems within the boundary of a building or structure is squarely within CIS. Work on public sewer or water main infrastructure as a utility sub-contractor may be subject to different contracting arrangements. If your contracts include utilities work, we review the nature of each engagement to confirm the correct CIS treatment.

GPS qualification with materials-heavy turnover

The Gross Payment Status turnover test uses your net CIS income, excluding materials and VAT. Drainage contractors with high materials costs may find that their qualifying CIS turnover is significantly lower than their total invoice value. We calculate the correct net figure as part of any GPS assessment to confirm whether you meet the £30,000 sole-trader threshold.

How we help

What we do for drainage contractors.

CIS refund and deduction base review

We review your payment and deduction statements, confirm the materials split is correctly applied on each contract, account for all allowable expenses including CCTV equipment costs, vehicle running costs and mileage at 55p per mile from April 2026, and submit your Self Assessment return.

Capital allowances on specialist equipment

We identify your qualifying capital expenditure on CCTV survey equipment, jetting vehicles and other specialist plant, and claim the correct capital allowances in the year of purchase. For a drainage contractor investing in survey equipment, this can significantly reduce the Self Assessment tax bill in the year of purchase.

Gross payment status application

If your net annual CIS turnover exceeds £30,000, we handle the GPS application, calculate the correct qualifying turnover figure (net of materials) and manage the compliance record.

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Questions from drainage contractors

Is drainage work within CIS?

Yes. Installation and repair of drainage systems is a listed construction operation under s.74(2)(c) Finance Act 2004, which explicitly includes installation of systems of drainage and sanitation. Payments from contractors to drainage subcontractors for this work are subject to CIS deduction unless the subcontractor holds Gross Payment Status.

I supply all the drainage pipe and chambers myself. Should my contractor deduct CIS from the full invoice?

No. The cost of pipes, chambers, backfill aggregate and other materials you supply should be excluded from the CIS deduction base before the 20% rate is applied. Only the labour element of your invoice is subject to deduction. If your contractor is applying the 20% rate to the full invoice value, you are overpaying and the difference is recoverable through Self Assessment.

Can I claim capital allowances on my CCTV drainage inspection camera?

Yes. CCTV drainage inspection cameras, push-rod and crawler units and related survey equipment are plant and machinery and qualify for capital allowances. The Annual Investment Allowance provides 100% first-year deduction on qualifying plant and machinery up to £1 million. If you bought the camera outright, the full cost is deductible in the year of purchase.

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Talk to a specialist drainage contractors accountant

Book a free call. We will talk through your CIS position, your deduction history and whether there is anything worth changing. No hard sell, no obligation.

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Specialist in CIS and construction accounting, not a generalist practice

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24-hour response guarantee

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Fixed fees, quoted before we start

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