Construction Industry Scheme - Insurance?

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DS has started work. Basically self employed under the CIS system. If you know are or have a family member who is, can you help and confirm what insurance policies you currently have in place? DS is 18. We are looking at tool insurance and accident insurance but I am not sure what else.

He will need public liability insurance.

Yes, PLI in case he is blamed for an accident/damage. I'd think carefully about personal accident insurance (if you mean the type that would pay out if he's injured and cannot work) and read the terms of the policy carefully as it could be expensive and have exclusions - while he's still living at home, it might be just better to just have savings instead and manage without an income.

Has he also registered for self assessment? He can claim the cost of insurance, tools and safety equipment off his tax and also travel to work, so he needs to keep records of this.

Does he understand how the money side works? Being on CIS will mean that he might not get huge tax bills (and indeed might get a refund depending on how much he earns after expenses) but he needs to save for tax and he also needs to recognise that if he's not working (eg holidays, sickness, Christmas shutdown or between contracts) he's not earning, so he should put money aside to cover this. He should also start a pension, which is more important when SE as there's no employer contribution. He should expect to put aside 30-50% of his income for tax, pension and a buffer for the times he's not earning, otherwise he'll come unstuck at some point.

But good luck to him. If he's good at the job and reliable (seriously, turning up on time, sober and getting on with the job instead of messing about puts you ahead of many) it could be the start of a decently paid career and he could have the opportunity to move between trades as he'll be able to see all the different jobs and hopefully get the opportunity to try them out.

DP used to work on housebuilding sites as a machine driver and has had licences to drive 3 or 4 different types like diggers, telehandlers, etc and once he got a foot in the door he earned quite decent money, particularly as all training is either on the job or a course that's a few days long. I also know a couple of guys who drive the really big machines - wrecking balls, cranes etc and the good ones with their own rig can be really in demand and more or less name their price.

Thank you both so much, this is really helpful. Yes, we have discussed things like holiday pay, pensions, sickness etc with him. He just wants to work which is good but I have my worries over this. That’s probably just being a mum though as it does seem the norm in the building industry. He’s not actually 18 until the end of May. I had a look at public liability briefly last night and he may not qualify until he is actually 18. His “employer” is taking 20% off him weekly and we have registered him for self assessment.

Definitely looking into a pension.

I work in the construction industry as a finance manager for a main contractor.

It all depends on what type of work he will be doing / who he will be working for.

If he is subcontracted by a contractor as a labour only sole trader (so working under their instruction), he would usually be covered by their insurances but he will need to check this. Also in this case, any contractor worth their salt will pay him under the CIS scheme and will deduct and forward on to HMRC 20% of any of his earnings earned from labour. When he submits his self assessment, if too much has been deducted from his overall earnings for the year, he will be refunded. If too little has been deducted, he will have a tax bill.

If he is working privately (for example, building Mrs Jones on Grove Street a garden wall) under his own instruction, he will need public liability insurance. He will also need to save some of his earnings (minimum 20%) to keep towards his tax bill when he does his self assessment. As no one is deducting and forwarding the 20% on his behalf as a contractor would, he needs to be sensible and keep it back himself as he is likely to have a tax bill.

There are plenty of insurance brokers who specialise in the construction industry who will be able to point him in the right direction for various insurances he may want.

You are welcome to PM me and I’ll give you contact details for our broker.

Thank you. Will send you a message.