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A person is a contractor under the construction industry scheme (CIS) where he is both a party to a construction contract and to a contract with a subcontractor in relation to any construction operations, or where he falls within one of the contractor categories¹. Where a business operates both as a contractor and as a subcontractor, they are a contractor for CIS purposes².

There are three main categories of contractor. The first ('mainstream' contractors) are persons who are automatically classed as contractors, namely:

1. Ìý

   •ÌýÌýÌýÌý any person carrying on a business which includes construction operations (see E5.541), and

2. Ìý

   •ÌýÌýÌýÌý the Secretary of State if the contract is made by him under the Housing Associations Act 1985, s 89³

Note that 'industrial plant' is included in the definition of construction operations. This has given rise to some controversy over the status of manufacturing concerns installing such plant. However, it would seem that to include such businesses in this category of contractor is contrary to HMRC practice as outlined in HMRC