What is meant by Labour-only?

The legal definition is: “Any agreement or arrangement, either written or oral, not being a contract or service or of apprenticeship or for provision of professional services, between an employer and any other person or persons, the purpose of which is wholly or mainly the provision of services of such persons or of any other person or persons to the employer in his trade or business.”

In simple terms an agreement is ‘Labour-Only’ where the purpose of the arrangement is mainly the provision of the service of the subcontractor’s labour. A subcontractor may supply some materials but if these do not represent the main materials required for the job, the agreement is labour-only. Any subcontractor regardless of type of trade or CIS Certificate held may potentially be paid on a labour-only basis.