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CIS accounting

Specialist accountants for welders and fabricators.

Welders and fabricators working in construction face a scope boundary that is genuinely important and commonly misunderstood. Off-site fabrication of structural components in a workshop, standing alone, is excluded from CIS under s.74(3) Finance Act 2004, which removes the manufacture of engineering components from the definition of construction operations. The position changes when you move to the site and install or fix the fabricated components: structural installation and fixing is an alteration or addition to a building or structure and is within CIS under s.74(2). If your work spans both fabrication and installation, the income needs to be correctly split and the CIS deduction applied only to the site element. Getting this wrong costs money on every contract.

Book a free callCIS refund service
20%
Deducted on site installation and fixing (CIS)
0%
CIS deduction on pure off-site workshop fabrication
~£2,000
Average first-year CIS refund (illustrative)
The specific challenges

What makes welders and fabricators accounting different.

Workshop fabrication versus site installation: the boundary that defines your CIS liability

Under s.74(3) Finance Act 2004, the manufacture of building or engineering components is explicitly excluded from CIS construction operations. A welder-fabricator who fabricates structural steel sections, balustrades or architectural metalwork in their own workshop, and delivers the finished components to site, is carrying out manufacturing work that is outside CIS. The payment for that work is not subject to CIS deduction. When the same fabricator goes to site to install, weld in position, or fix those components to the structure, that installation work is within CIS as an alteration or addition to a building or structure under s.74(2)(a). On a combined fabricate-and-fix contract, the deduction should apply only to the site installation element.

Materials in fabrication and installation work

Steel sections, plates, box section, angle iron, welding rod, primer and protective coatings are materials costs excluded from the CIS deduction base on the portion of work that is within CIS. Where the full contract value includes both workshop fabrication (outside CIS) and site installation (within CIS), we review the contract split and ensure the deduction base is restricted to the labour on the installation element only.

Equipment and workshop capital allowances

MIG and TIG welding sets, plasma cutters, angle grinders, drilling machines, fabrication tables and workshop equipment are plant and machinery eligible for capital allowances. The Annual Investment Allowance provides a 100% first-year deduction on qualifying equipment up to £1 million. Many fabricators capitalise workshop equipment correctly but miss the ongoing depreciation and repair costs in their annual return.

CIS registration status when doing both fabrication and installation

If any part of your work involves on-site installation or fixing under a CIS contract, you should be registered as a CIS subcontractor. An unregistered welder-fabricator doing on-site installation will be deducted at 30% rather than 20% on the CIS-applicable element. Registration is free and immediate. Staying registered protects your rate even when you move between fabrication-only and fabricate-and-fix contracts across the year.

How we help

What we do for welders and fabricators.

Workshop versus site income analysis

We review your contracts and determine the correct CIS treatment for each element: pure workshop fabrication (outside CIS), delivery (outside CIS), and site installation or fixing (within CIS). We ensure the deduction base on CIS-applicable payments reflects the installation labour only, not the full contract value.

CIS refund and Self Assessment filing

We account for all allowable expenses including steel, consumables, workshop equipment costs, mileage at 55p per mile from April 2026, and capital allowances on welding sets and fabrication equipment. We submit your Self Assessment return to recover the full refund on CIS-deducted income.

Gross payment status application

If your net annual CIS turnover on the site installation element exceeds £30,000, you may qualify for GPS and receive those payments with no deduction. We handle the application, the three qualifying tests and the compliance record.

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“Nobody had explained that the workshop fabrication work was outside CIS. My contractor had been deducting 20% from the full contract value for two years. Once we split the fabrication from the installation element, the refund was substantial.”
Self-employed welder-fabricator, structural steelwork sector

Composite snapshot based on client patterns. Name and figures anonymised. The tax mechanics are real.

Questions from welders and fabricators

I fabricate structural steelwork in my workshop and deliver it to site. Is that within CIS?
No. The manufacture of engineering or building components is explicitly excluded from CIS construction operations under s.74(3) Finance Act 2004. Workshop fabrication and delivery of finished structural components to site does not attract a CIS deduction. The payment for that work is not a contract payment for CIS purposes. The position changes if you also go to site to install, weld in position or fix the components: the on-site installation element is within CIS.
I fabricate balustrades in my workshop and then go to site to install them. How is CIS applied?
The contract has two elements. The workshop fabrication element is outside CIS under s.74(3) Finance Act 2004. The on-site installation element is within CIS as an alteration to a building or structure under s.74(2)(a). The 20% CIS deduction should be applied only to the labour on the installation element. If your contractor is applying the deduction to the full contract value (including the workshop fabrication), they are overstating the deduction base and you are overpaying.
Are my welding sets and fabrication equipment tax deductible?
Yes. MIG and TIG welding sets, plasma cutters, angle grinders, fabrication tables and other workshop equipment are plant and machinery eligible for capital allowances. The Annual Investment Allowance provides a 100% first-year deduction on qualifying equipment up to £1 million per year. If you bought new welding equipment this year, the full cost can be deducted against your CIS income.
Do I need to be CIS registered if most of my work is workshop fabrication?
If any part of your work involves on-site installation or fixing under a CIS contract, you should register as a CIS subcontractor to avoid the 30% unregistered deduction rate being applied to the CIS-applicable portion. If genuinely all your work is workshop fabrication and delivery with no on-site installation, CIS does not apply. In practice many fabricators carry out some site work and registration is therefore the safer default.
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Talk to a specialist welders and fabricators 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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