Paying another freelancer to help with client work — do I need to think about CIS?
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I run a small business in London, and I have just won a larger piece of client work than I can handle on my own. I am thinking about paying another freelancer about £1,800 to help with part of the job, which includes some fitting and finishing work at the client's premises. They would use their own tools, set their own hours within the project dates, and invoice me for the work. I have paid freelancers before for purely office-based help, and I simply paid their invoice in full, but this job feels different because it involves work on a building.
Does the Construction Industry Scheme come into this at all? I am not a construction company, and I do not usually work in construction, but I have read that CIS can apply when a business pays a subcontractor for construction work, even if construction is not its main trade. Is that right, or does it only apply to businesses that are registered as contractors? I want to know whether I need to register, verify the freelancer, or deduct anything from their payment before I agree the job.
I am also unsure how to tell whether the specific work counts as construction work for CIS purposes. The work includes installing fixtures and some finishing touches, rather than building an extension or doing major structural work. If only part of the job is construction work, do I split the payment, or does the whole amount fall under CIS? And what happens if the freelancer supplies some materials as well as labour?
Finally, what records and paperwork should I keep if CIS does apply, and what are the risks if I get it wrong and just pay the invoice in full? I would rather sort this out now than face a problem later, so any clear steps, examples, or pointers to what to check first would be very welcome.