Understand regulatory thresholds and obligations that apply as your business grows.
The UK public sector spends over £40 billion annually on construction. From schools and hospitals to infrastructure projects, government procurement offers stable, large-scale work. The Procurement Act 2023 improves SME access with simplified processes and faster payments.
Official guidance (opens in a new tab)
Understanding public procurement thresholds
Different rules apply based on contract value. Below-threshold contracts have simpler requirements. Above-threshold works contracts follow full procurement procedures.
Works contracts (construction, civil engineering)
£5,193,000
Goods/services - central government
£135,018
Goods/services - local authorities, NHS, universities
£207,720
Utilities sector contracts
£415,440
Light touch regime (social, health, education services)
£663,540
Concession contracts
£5,193,000
Contracts at or above these thresholds must follow full Procurement Act 2023 procedures and be advertised on Find a Tender. Thresholds are reviewed every two years.
Find a Tender service (opens in a new tab)
Learn how to find and bid for government construction contracts. Includes tender portals, SME rights, and social value requirements.
Finding construction opportunities
Use official procurement portals to find construction tender opportunities across the UK.
UK-wide (above threshold)
Find a Tender
England (below threshold)
Contracts Finder
Scotland
Public Contracts Scotland
Wales
Sell2Wales
Northern Ireland
eSourcing NI / eTendersNI
Find a Tender (opens in a new tab)
How to write competitive bid documents that score well in public sector evaluations.
Social value requirements
Central government contracts require minimum 10% social value weighting. Demonstrate local employment, apprenticeships, and environmental benefits.
Minimum social value weighting (central government)
10% of tender evaluation
Mandatory from
October 2025
Applies to
Above-threshold central government contracts
Social value considers how the contract can deliver wider benefits such as:
Creating jobs and training opportunities
Supporting SMEs in the supply chain
Reducing environmental impact
Tackling economic inequality
Bidders should demonstrate how they will deliver social value outcomes relevant to the contract.
PPN 002: Social Value Model (opens in a new tab)
Search for construction and infrastructure contracts on the official UK tender portal.
Growing construction businesses need robust employment systems. Register for PAYE before first payday, ensure all workers have valid CSCS cards, and manage the distinction between employees and CIS subcontractors carefully. HMRC actively investigates employment status in construction.
Applies to: Construction businesses hiring employees or engaging subcontractors
Official guidance (opens in a new tab)
Set up PAYE 4-6 weeks before your first payday. Construction businesses often need both PAYE and CIS.
CSCS card requirements for your team
Ensure all site workers have appropriate CSCS cards. Principal contractors typically require valid cards for site access.
The Construction Skills Certification Scheme (CSCS) is the UK construction industry's standard for demonstrating competence. While not legally mandatory, most principal contractors require all workers to hold a valid CSCS card for site access.
Purpose
Proves workers have required qualifications and health & safety awareness
Legal requirement
Not legally required, but industry standard for site access
Main card types
Green (Labourer), Blue (Skilled Worker), Gold (Supervisor), Black (Manager)
Application cost
£36 for most card types + £22.50 for HS&E test
Validity
5 years for most cards (must retake HS&E test to renew)
HS&E test pass mark
45/50 (90%) - 50 multiple choice questions in 45 minutes
CDM 2015 connection
Supports principal contractor duty to ensure workforce competence
Employer responsibility
Check all workers hold valid cards appropriate to their role
Apply for a CSCS card (opens in a new tab)
CSCS card types and qualification levels
Different card colours indicate qualification levels - from green labourer cards to black manager cards. Match cards to roles.
Green Labourer Card
Entry level - requires HS&E test pass only (no qualification needed initially)
Red Trainee Card
For workers enrolled on approved construction training - 2-year card (Level 2+ non-competence qual) OR 5-year card (registered on NVQ/SVQ) from Feb 2025
Blue Skilled Worker Card
Requires NVQ Level 2 or equivalent in construction occupation + HS&E test
Gold Supervisory Card
Requires NVQ Level 3/4 or SSSTS qualification + HS&E test
Black Manager Card
Requires NVQ Level 6/degree + SMSTS or equivalent + HS&E test
White Advanced Craft Card
Requires NVQ Level 3 + 5+ years proven experience + HS&E test
Black Professional/Chartered Card
Requires degree + professional body registration (ICE, RICS, CIOB, etc.)
Essential checklist for becoming an employer, including NMW, NI, and pension auto-enrolment.
Larger contractors must verify all subcontractors before payment. Keep detailed CIS records - HMRC can request 3 years of verification data. Consider CIS Gross Payment Status for reliable subcontractors to improve their cash flow and simplify your administration.
Applies to: Construction contractors making payments to subcontractors
Official guidance (opens in a new tab)
Step-by-step process for verifying subcontractors and making correct CIS deductions.
CIS requirements for contractors
Contractors must verify subcontractors, make correct deductions (20% or 30%), and submit monthly CIS returns to HMRC.
Contractor registration
Must register before taking on your first subcontractor
£3 million threshold
Businesses spending £3m+ on construction in 12 months count as contractors
Subcontractor deduction rate
20% for registered subcontractors, 30% if unregistered
Gross payment status
Apply for gross payment to avoid deductions (strict tests apply)
Construction Industry Scheme (opens in a new tab)
CIS Gross Payment Status
Subcontractors with sufficient net construction turnover (excluding materials) and a good compliance history can apply for Gross Payment Status to receive full payment without deductions. The turnover test is £30,000 for a sole trader; partnerships and companies need £30,000 per partner or director, or £100,000 or more for the whole business.
Regulator
Hmrc
Typical fee
None
Timeline
6-8 weeks for application review
Frequency
annual review
Legal basis
Income Tax (Construction Industry Scheme) Regulations 2005
Allows subcontractors to receive full payment without CIS deductions. Requires business test (£30,000+ turnover), compliance test (tax returns filed on time, no tax debts), and must pass annual review. Applications can be made 12 months after CIS registration.
Official HMRC guidance on the turnover and compliance tests.
Major clients require specific accreditations. ISO 9001 (quality management), ISO 14001 (environmental), and ISO 45001 (health and safety) demonstrate professional standards. CHAS, Safe Contractor, and Constructionline provide pre-qualification for many clients.
Official guidance (opens in a new tab)
Required for some central government contracts involving personal data or certain ICT services. Demonstrates basic cyber security standards.
FORS accreditation for vehicle fleets
Fleet Operator Recognition Scheme accreditation is required for construction vehicles in London and increasingly demanded elsewhere.
Regulator
Tfl
Typical fee
£500-£2,000+ depending on fleet size
Timeline
3-6 months to achieve Bronze standard
Frequency
annual
Legal basis
Industry accreditation (contractual requirement)
Required for many TfL contracts and increasingly by private sector clients. Three levels: Bronze (entry), Silver, Gold. Focuses on safety (driver training, vehicle safety features, safe urban driving), environmental compliance, and operational efficiency. Particularly important for London construction projects. Voluntary scheme but contractually required by many clients.
Pre-qualification for thousands of buyers. Gold and Plus levels demonstrate higher capability.
Safety Schemes in Procurement - CHAS, Safe Contractor, and others accepted across the industry.
Comprehensive guide to CDM 2015 duties for all parties - clients, designers, and contractors.
Understand your duties when commissioning construction work as a client.
Mandatory VAT registration when turnover exceeds £90,000. Construction has special VAT rules: domestic reverse charge on certain building services means you may receive payment without VAT. Consult an accountant familiar with construction VAT.
Applies to: Construction businesses with turnover approaching or exceeding VAT threshold
Official guidance (opens in a new tab)
VAT registration requirements
Register for VAT when taxable turnover exceeds £90,000 in any 12-month period. Construction materials are standard-rated; some works are zero-rated or reduced-rate.
VAT registration is required if taxable turnover exceeds £90,000 in any 12-month rolling period. Registration is also available voluntarily if turnover is below this threshold.
VAT registration threshold
£90,000 per year (from 1 April 2024)
Deregistration threshold
£88,000 per year
Registration deadline
Within 30 days of exceeding threshold
Penalty for late registration
Penalties and interest on VAT that should have been collected
Calculating taxable turnover Count sales of VAT-taxable goods and services (standard, reduced, or zero-rated). Do not count:
VAT-exempt sales (insurance, education, health services) Sales of capital assets (equipment you're selling) Non-business income Use a rolling 12-month calculation : At the end of each month, look back over the previous 12 months. If total taxable turnover exceeds £90,000, you must register.
Voluntary registration VAT registration is available even if turnover is below £90,000. Benefits include:
Reclaim VAT on expenses Including startup costs (up to 4 years before registration)Business credibility VAT registration can make businesses appear more establishedWork with VAT-registered businesses They can reclaim VAT charged to themPrepare for growth Get VAT processes in place before mandatory registrationDrawback VAT must be charged to customers, which may increase prices or reduce margins if absorbed.
Registration process Register online via HMRC (gov.uk/register-for-vat)Provide business information: Name, address, turnover, business activities, bank detailsChoose VAT scheme (standard accounting, flat rate, cash accounting)Receive VAT registration number within 30 working daysStart charging VAT from your effective registration date
Processing time
Usually within 30 working days
Effective date
Date you exceeded threshold, or date you choose (voluntary)
First VAT return due
By 1 month and 7 days after end of first VAT period (usually quarterly)
Register for VAT (opens in a new tab)
Business funding for growth
Access government-backed loans and grants to fund expansion, equipment, and working capital.
Start Up Loans
£500-£25,000 at 7.5% fixed rate (rose from 6% on 6 April 2026). Includes 12 months free mentoring.
Growth Guarantee Scheme
Government-backed loans up to £2 million for established businesses.
Grants
Not repayable but competitive. Check regional and sector-specific schemes.
British Business Bank
Helps connect smaller businesses with finance providers.
Finance and support for your business (opens in a new tab)
Find government-backed loans, grants, and financial support for growing businesses.
Larger projects require higher insurance limits. Public liability minimum £5 million is common for commercial work; many clients require £10 million. Professional indemnity is essential if providing design services. Review cover annually as turnover and project values increase.
Applies to: Construction businesses taking on larger contracts
Official guidance (opens in a new tab)
Understand legally required insurance and recommended cover for construction businesses.
Employers' liability insurance
Legally required if you employ anyone, including casual workers. Minimum £5 million cover; many construction businesses carry £10 million.
Legal requirement
LEGALLY REQUIRED if you employ anyone (even part-time staff)
Minimum cover
£5 million minimum (most policies provide £10 million)
Penalty for non-compliance
£2,500 fine per day without insurance, plus £1,000 fine for not displaying certificate
What it covers
Compensation claims from employees injured or made ill at work
Exemption
Unincorporated businesses employing only close family members are exempt (the exemption does not apply to limited companies)
Employers' Liability Insurance (opens in a new tab)
Professional indemnity insurance
Essential if you provide design services, project management, or professional advice. Required for many public sector contracts.
Legal requirement
Required under profession-specific regulatory rules for many solicitors, financial advisers and architects. Healthcare requirements vary by role and regulator. For accountants, PI cover is generally a professional-body requirement (e.g. ICAEW, ACCA) rather than a statutory one
Solicitors minimum
£2-3 million per claim (SRA minimums)
Financial advisers minimum
€1.25 million per claim (FCA requirement)
Architects minimum
£250,000 for domestic work
What it covers
Claims of negligent advice or services causing client financial loss
Insurance types comparison
Review your insurance portfolio as your construction business grows.
UK businesses need different types of insurance depending on their activities. Some are legally required, others are contractually required, and some are optional but prudent. Understanding the differences helps ensure adequate protection.
Employers' Liability
LEGALLY REQUIRED if you employ anyone. Minimum £5m cover. Protects against employee injury/illness claims.
Motor Insurance
LEGALLY REQUIRED for any vehicle used for business. Criminal offence to drive uninsured.
Professional Indemnity
Required for some regulated professions under their profession-specific rules, including many solicitors, financial advisers and architects. Covers negligent advice claims.
Public Liability
NOT legally required but often contractually required by clients. Covers third-party injury/damage claims.
Products Liability
NOT legally required but essential for manufacturers and retailers. Covers claims from defective products.
Business Contents
NOT required but recommended. Covers theft, fire, damage to business assets.
Business Interruption
NOT required but recommended. Covers lost income when you cannot trade.
Cyber Insurance
Increasingly important. Covers data breaches, ransomware, GDPR fines.
Key Person
Optional. Compensates business if critical person dies or is incapacitated.
Choosing the right cover: Do you employ anyone? Employers' Liability is legally requiredDo you use vehicles for work? Business motor insurance is legally requiredAre you a regulated professional? Check your regulator's profession-specific Professional Indemnity rulesDo you interact with customers or visit premises? Public Liability is practically essentialDo you sell physical products? Products Liability is strongly recommended
Waste management, environmental permits, and sustainability requirements for construction sites.
Waste carrier registration
Register as a waste carrier if transporting construction waste. Upper tier registration required for commercial waste transport.
Construction businesses must register as a waste carrier even when transporting their own construction or demolition waste. This is a legal requirement across England, Wales, and Scotland with different fees and processes by nation.
England upper tier new registration
£191.02 (3-year validity)
England upper tier renewal
£130.25 (every 3 years)
Wales upper tier new registration
£169 (3-year validity)
Wales upper tier renewal
£116 (VAT exempt)
Scotland own waste transport
Free registration with SEPA
Lower tier registration
£0 (applies when not transporting others' waste)
Registration validity period
3 years (upper tier) or indefinite (lower tier)
Change notification period
28 days (must notify regulator of changes)
Register as a waste carrier (opens in a new tab)
Comprehensive health and safety compliance for construction operations.
Health and safety management
As you scale, implement formal H&S; management systems. ISO 45001 certification demonstrates commitment to safety.
Written policy (5+ employees)
Required by law - must record your health and safety policy
Risk assessment
All employers must assess workplace risks and act on findings
Employers' Liability insurance
Mandatory £5 million minimum cover (£2,500/day penalty)
First aid provision
Assess needs and provide appropriate equipment and trained staff
Accident book (RIDDOR)
Record injuries and report serious incidents to HSE
HSE - Getting started with health and safety (opens in a new tab)
Partnerships unlock projects too large for one contractor. Joint ventures (JVs) allow sharing of risk, resources, and expertise. Common structures include special purpose vehicles (SPVs) for major projects, or formal consortium arrangements for public sector frameworks.
Official guidance (opens in a new tab)
Partnership structures
Choose the right structure for collaboration - joint ventures, consortiums, or formal partnerships each have different liability and tax implications.
Three partnership structures are available in the UK, each with different liability, registration, and governance requirements.
Ordinary (general) partnership
Not a separate legal entity. Partners personally liable for all debts (joint and several). No Companies House registration required. Governed by Partnership Act 1890.
Limited partnership (LP)
Not a separate legal entity. General partners have unlimited liability; limited partners' liability capped at capital invested. Limited partners must not participate in management. Must register with Companies House. Governed by Limited Partnerships Act 1907.
Limited liability partnership (LLP)
Separate legal entity (incorporated). Members not personally liable for partnership debts. Must register with Companies House. Must file annual accounts and confirmation statement. Governed by Limited Liability Partnerships Act 2000.
Set up a business partnership (opens in a new tab)
Compare ordinary partnership, limited partnership, and LLP options for joint ventures.
Essential terms for construction joint ventures and partnership arrangements.
Partnership agreement essentials
Formal written agreements are essential for joint ventures. Define profit sharing, decision-making, and exit provisions clearly.
A well-drafted partnership agreement should address these key areas to avoid relying on Partnership Act 1890 defaults.
Basic information
Full names, addresses, and contact details of all partners
Partnership trading name
Nature and scope of business activities
Commencement date and duration (fixed term or ongoing)
Principal place of business
Capital and finance
Initial capital contributions (cash, equipment, property, intellectual property)
Whether interest is paid on capital
Process for additional capital calls
Terms for partner loans to the partnership
Profit, loss, and drawings
Profit sharing ratio (equal, pro-rata to capital, performance-linked, or lockstep)
Loss sharing ratio (can differ from profit sharing)
Drawings - amount, frequency, treatment against profit share
Any salary or guaranteed payments
Management and decisions
Day-to-day management responsibilities
Voting rights (one partner one vote, or weighted)
Reserved matters requiring unanimity (new partners, major expenditure, sale of business)
Deadlock resolution provisions
Partner obligations
Time commitment (full-time, part-time, holiday, sickness)
Non-compete restrictions during partnership
Confidentiality obligations
Exit and dissolution
Exit mechanisms (retirement, expulsion, death provisions)
Valuation method for departing partner's share
Payment terms (lump sum, instalments, deferred)
Post-exit restrictive covenants
Dispute resolution
Escalation process (negotiation, mediation, arbitration, litigation)
Major building safety reforms affect higher-risk buildings. The Building Safety Regulator oversees buildings over 18m or 7+ storeys. New Gateway stages require design approval before construction. Principal Contractors and Principal Designers have specific statutory duties.
Applies to: Construction businesses working on residential buildings over 18m or 7+ storeys
Official guidance (opens in a new tab)
HSE guidance on Building Safety Act requirements for higher-risk buildings.
Construction industry resources
Access industry bodies, training providers, and support organisations as you grow.
Free local business support and advice for growing businesses, now run by local and combined authorities following the wind-down of Local Enterprise Partnerships.
Industry training, grants, and qualifications for construction workforce development.