From March 2025, traffic management companies working on construction projects have officially been brought under the Construction Industry Scheme (CIS). This update by HMRC recognises some traffic management operations as part of construction work that includes road closures, diversions, on-site safety and preparatory works. This is a fundamental shift for traffic-management businesses. The change introduces new compliance responsibilities and stricter reporting requirements, bringing greater accountability across the sector. Understanding the Construction Industry Scheme (CIS) The Construction Industry Scheme (CIS) regulates how payments are made to subcontractors working in the construction industry. Under the scheme, contractors must register with HMRC, verify subcontractors before making payments, deduct tax at source, and submit monthly CIS300 returns and remit taxes to HMRC by strict deadlines. Before the changes introduced in March 2025, traffic management companies operated outside these regulations, which sometimes led to unequal tax treatment and the misclassification of workers. The update closes that gap, bringing traffic management in line with other core construction activities and ensuring greater consistency across the sector. Traffic-Management Operations Included Within the Scope CIS According to HMRC’s internal manual CISR14305, traffic management services required to enable road works and other construction operations to be completed safely are now classed as preparatory or integral operations under the Construction Industry Scheme (CIS). Examples of traffic-management operations now covered by CIS include: Source: HMRC CISR14305 Manual Operations Explicitly Excluded (Remain Outside CIS) HMRC also lists some traffic management work that remains out of the scope of CIS: Source: GOV.UK – CIS Guidance VAT Domestic Reverse Charge From 1 March 2025, traffic management services within the Construction Industry Scheme (CIS) will also be subject to the Domestic Reverse Charge rules for VAT. This means that when one VAT-registered contractor supplies services to another, no VAT is charged on the invoice. Instead, the customer accounts for the VAT on their VAT return. However, when the service is supplied to an end user (like a developer, local authority, or business using the service themselves), the reverse charge does not apply. In that case, normal VAT rules apply, and VAT must be charged on the invoice to the end user. Source: GOV.UK – VAT Domestic Reverse Charge for Building and Construction Services Compliance and Potential Risk CIS compliance is not a simple responsibility. Returns must be submitted monthly, records must be maintained accurately, and tax deductions must be applied correctly. Any errors can lead to penalties, lost contracts, or reputational damage. Compliance responsibilities go beyond payment deductions and tax reporting. You are required to perform right-to-work checks, identity checks, IR35 status determination checks and meet data protection (GDPR) obligations. When subcontractor arrangements are not carefully examined, there’s a serious risk of misclassifying a worker as self-employed. How The Infinity Group Can Help The Infinity Group takes the administrative burden off your shoulders by managing the entire CIS process. We take care of everything from start to finish, ensuring complete accuracy and compliance. CIS Payroll Management Compliance Checks Subcontractor Support Secure Online Portal Our online portal provides complete visibility over payments, deductions, invoices and statements — helping contractors and subcontractors access all data easily, anytime. All data is processed in line with GDPR regulations, ensuring security, transparency, and reliability. With The Infinity Group, you can save time, minimise compliance risk, and focus on your core operations while we manage your CIS responsibilities accurately and efficiently. To find out more about our services, get in touch with our CIS team today. Conclusion: Adapting to the New Rules The inclusion of traffic management companies within CIS has changed the compliance requirements across the industry. Contractors must now ensure all processes are carried out in line with HMRC standards, as all the rules are already in effect. Infinity Group provides the guidance and support needed to manage this transition. We handle the complexity, reduce risk and give you peace of mind that your business is fully compliant. Contact our CIS experts today to ensure you are meeting every requirement under the new rules. Frequently Asked Questions (FAQs) Should traffic management companies be registered for CIS?Yes. Traffic management providers delivering services related to construction must be registered under the Construction Industry Scheme since March 2025. What happens if I do not adhere to CIS rules?Failure to comply may result in penalties from HMRC, loss of contracts and reputational damage. What is the procedure for verifying subcontractors under CIS?Before making any payments, subcontractors must be verified with HMRC to determine the correct tax deduction rate. We carry out this verification directly with HMRC and apply the appropriate rate of 20%, 30%, or 0% (gross payment status). This ensures all payments are fully compliant with CIS regulations. 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Identity Verification at Companies House: What UK Directors Need to Know
From 18 November 2025, verifying identity with Companies House will become a new legal requirement for all UK company directors and people with significant control (PSCs). This change, introduced under the Economic Crime and Corporate Transparency Act 2023, aims to improve corporate transparency and prevent UK companies from being used for fraud, money laundering, and other financial crimes. This is not a routine compliance step for directors and business owners. It represents a major change in UK company regulation. Verified identity will now be required when filing a confirmation statement or registering a new company. Without verification, filings may be rejected and penalties may be imposed. In serious or repeated non-compliance cases, Companies House can strike a company off the register, effectively dissolving it. At The Infinity Group, we see this reform as an opportunity for businesses to enhance transparency, strengthen governance, and build trust. Preparation should begin early, ensuring that identity verification is completed well in advance rather than left until the last moment, as delays could prove costly. Why the Government Is Introducing Identity Verification The UK is known for having a fast and simple system of setting up companies. While this has encouraged growth and new business, it has also left gaps that have been used for illegitimate purposes. Examples include: To deal with these risks, the government has introduced compulsory identity verification checks. The aims are to: This reform is not only about tackling financial crime, it also helps to strengthen the reputation of UK companies and build trust with legitimate businesses. Who Needs to Verify Their Identity You’ll need to verify your identity if you are: In most cases, you’ll only need to verify your identity once. You won’t need to repeat the process unless you are told to do so. Identity verification will also be required later for: For more detail, see the official guidance on when to verify. Key Deadlines and the Transition Period Verification becomes compulsory from 18 November 2025, marking the start of a 12-month transition period. It is not a single deadline. Instead, you’ll need to provide your personal code at the correct time, depending on your role and when your company filings are due. 1. Directors (or equivalent) 2. People with Significant Control (PSCs) 3. Authorised Corporate Service Providers (ACSPs) You can check your company’s deadline here: Check when your next confirmation statement is due. Failure to comply means the company cannot file its confirmation statement. This can quickly escalate to late filing penalties, reputational harm, and in extreme cases, compulsory strike-off. How to Verify Your Identity Verification can be done in two ways: GOV.UK One Login This is the most common option for UK-based directors and PSCs. The process is completed online, and individuals must provide identity documents, such as a UK photo driving licence, biometric passport (from any country), UK biometric residence permit (BRP), UK biometric residence card (BRC), or UK Frontier Worker permit (FWP). You’ll also need to provide your current address when verifying your identity and either sign in or create a GOV.UK One Login account. Once your identity is successfully verified, Companies House will issue you a personal code. This code is linked to all your company roles and must be used in all future filings. If you do not have these types of photo ID, you can check other accepted options here:Verify your identity for Companies House Authorised Corporate Service Provider (ACSP) Verification can also be carried out on behalf of directors and PSCs by authorised agents such as approved accountants, solicitors, and other professionals. This is a practical solution for overseas directors or those unable to complete verification online. The ACSP checks the identity documents, confirms the information, and arranges the issue of the personal code. Find out more here: https://www.gov.uk/using-your-gov-uk-one-login/proving-your-identity. Companies House will not accept identity documents by post or email. Verification can only be done online or through a registered service provider. Verification Process in Steps The process is designed to be straightforward: Details are available here: Find out about your Companies House personal code. Preparing Your Business Now The best way to avoid this is to be ready early rather than be in a hurry to meet deadlines. Practical steps include: Such measures will reduce the level of disruption and get your company back on schedule. Non-Compliance Consequences The new regime is mandatory. In case directors or PSCs are not verified: The results are severe. Checking is no longer an option; it is now a requirement before one can conduct business in the UK. Staying Up to Date The identity verification is one of the wider reforms to UK company law. Additional changes will also come into effect, which include limited partnerships, corporate directors, and members of LLPs. In order to remain well informed on your company: How The Infinity Group Can Help At The Infinity Group, we keep businesses informed about the latest updates in laws and regulations in the UK. We provide timely updates, practical guidance, and direct you to the appropriate official resources when needed. To ensure you remain compliant and up to date with legal changes, subscribe to our newsletter. Frequently Asked Questions Do overseas directors need to verify?Yes. Every director and PSC must verify, even if they are based outside the UK. Can one personal code be used for multiple companies?Yes. The same personal code applies to all your roles, but each company must link it individually. What if my identity documents do not match the Companies House register?You must correct the register before completing verification. Any mismatch will prevent the process being completed. Some corrections may require a paper form. Is verification a one-time process?Yes. Once completed, the verification does not need to be repeated, but your personal code and verification statement will be required whenever you take on a new role. Can The Infinity Group act as an ACSP?Yes. The Infinity Group is authorised to verify identities on your behalf, providing a convenient solution for both UK-based and overseas stakeholders. Subscribe