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Meaning of Contractor

What does the term contractor mean?

Any individual, partnership or company carrying on a business which includes construction operations; or any individual, partnership or company which, although not engaged in the construction industry, regularly incurs expenditure on construction operations in the course of a business.

A non-resident is included if that person is performing construction operations on the Isle of Man.

What are the main criteria for a business to be considered to have regularly incurred expenditure on construction operations?

A business is considered to have regularly incurred expenditure on construction operations if -

• the average annual expenditure on construction operations over a three year period up to the end of the last period of account exceeds £50,000, or
• where it has not been carrying on the business for a three year period, one third of the total expenditure on construction operations for the period since commencement exceeds £50,000.

Can a person be a contractor and a subcontractor?

Yes, it is possible for a person to be a subcontractor to a main contractor but in turn a contractor to another person engaged by them to act as a subcontractor.

Who does not qualify as a Contractor?

The following are not contractors:

1. a private householder having work done on his own premises,
2. a Government Department, Douglas Corporation and Town, Parish and Village Commissioners,
3. a business which is not engaged in construction operations and whose average annual expenditure on construction work on its own premises is less than £50,000.