Traffic management services now within scope — what it means for your business.
From 1 March 2025, HMRC expanded the scope of the Construction Industry Scheme (CIS) to include certain traffic management services. This change could have a significant impact on both contractors and subcontractors operating in or adjacent to the construction sector.
This article should help you understand what this means, how it affects your obligations, and what steps you should take to stay compliant.
What’s changing?
Under the new guidance, traffic management services that are directly linked to construction operations are now considered within the scope of CIS. This includes services that are preparatory, enabling, or integral to construction work.
Examples of In-Scope Services:
- Preparatory road / construction works such as tree/vegetation removal, temporary white lining, or temporary road repairs ahead of permanent repairs
- Installation of temporary traffic lights or signage for construction work
- Placement of cones, barriers, or pedestrian diversions to enhance safety on a construction project
- On-site traffic control during construction or maintenance projects
- All traffic management work required for the safe completion of roadworks and other construction operations
Out-of-Scope Services:
- Traffic management for non-construction events (e.g., festivals, parades)
- Delivery-only services without installation or on-site involvement (e.g. dropping off traffic cones to a designated drop-off point but not installing them)
Why the Change?
According to HMRC, these services are now considered “integral or preparatory” to construction operations, similar to scaffolding or plant hire with operators. This aligns with the broader interpretation of construction-related activities, which includes operations that enable or complete construction work.
Why does this matter for your business?
For Contractors using these services:
CIS deduction obligations: You must now apply CIS rules when paying subcontractors for qualifying traffic management services.
- Monthly returns and risk of penalties: Ensure your monthly CIS returns accurately reflect these payments to avoid penalties.
- Contract reviews: Reassess service agreements to determine which fall under the new rules.
For Subcontractors i.e. traffic management providers:
- Cash Flow Impact: Payments may now be subject to 20% or 30% CIS deductions unless you hold gross payment status.
- Registration Required: If not already registered under CIS, you must do so to avoid higher deductions.
- Record-Keeping: Maintain clear documentation of services provided and their link to construction activities. Providers must assess each contract to determine CIS applicability.
What about VAT?
The VAT domestic reverse charge (DRC) for construction will also need to be considered in respect of such traffic management services from 1 March 2025. Many contractors and suppliers of traffic management services may have concluded that traffic management activities fell outside of the DRC previously, so this may need to be looked at again by both suppliers and purchasers of such services. Where it is concluded that the DRC may apply, consideration should be given to making sure appropriate processes and procedures are in place to ensure the correct VAT treatment is applied.
How We Can Help
At Hazlewoods, we can support you with:
- Contract reviews – We’ll help you assess which services are now in scope.
- CIS compliance checks – Ensure your systems and processes are up to date.
- Gross Payment Status applications – We can manage the application process for you.
- Training & Support – We offer tailored guidance for your finance and operations teams.
For further information around how we can help, head to our Construction page.
If you’re unsure whether your business is affected, or how to implement these changes, please get in touch with one of our CIS specialists.
