I have a limited company, and ever since its incorporation it has been solely a residential property lettings business with payments made for repairs to properties that are substantially below the limit for a deemed contractor, so CIS has not been an issue. Last year, the company bought a property that was to be refurbished and rented out. However, on completion of the refurbishment an offer was made to purchase it by a third party, which was accepted giving a profit. The same company has recently purchased another property with the sole intent of selling it on.  Will I have to register the company for CIS as it seems to have become a property development company? Also should the company be deducting CIS from repair work on the portfolio of investment properties?

Arthur Weller replies:
Look at www.hmrc.gov.uk/manuals/cisrmanual/CISR12080.htm where you can see that where a property investment business gets involved in property development, then for that period of time they need to register for CIS. However after the property development work finishes, they can deregister. It really depends on the amount of involvement in property development - see the CIS guidance.