Builder legal issues

Builder using concrete blocks for building a wall at sunsetAs a business person engaging in construction activities that are potentially hazardous to both people and the environment, there is certain legislation that you should be aware of.

The following is an outline of some of the areas which may well be relevant to you.

What licences does a builder need?

There are no specific licences that you need to work as a general builder, so if your business activities are going to fall within the usual range of services offered by this type of business you may not need to do anything further.

Building waste

If you are going to transport building waste (which is classified as a controlled waste), you will need a certificate of registration as an upper tier waste carrier (just 'waste carrier' in Scotland). This is issued by the Environment Agency in England, Natural Resources Wales, the Northern Ireland Environment Agency, and the Scottish Environment Protection Agency (SEPA) in Scotland. It currently costs about £155 for the initial registration fee and a further renewal fee of about £105 every three years. Note that a single licence is issued to your business covering all of your waste transporting vehicles.

Note that any business which produces 500kg or more of hazardous waste at a premises in Wales within a 12 month period must register with Natural Resources Wales as a hazardous waste producer. If you produce 500kg or more of hazardous waste at a single customer's site (or at any other site which you do not own or occupy) then it is up to the owner of that site to register. If you remove the hazardous waste from your clients' sites, and this amounts to 500kg or more in total for a 12 month period, then your own premises or depot must be registered as a 'service premises'. You can find out more about hazardous waste producer registration on the Gov.uk website.

Asbestos

If you intend to do any work involving asbestos (this might include removing old roofing sheets, for example) you may need a licence from the Health and Safety Executive (HSE) Asbestos Licensing Unit - or from the Health and Safety Executive Northern Ireland (HSENI). An alternative to undertaking licensable work yourself is to contact a licensed asbestos specialist - this is a more realistic option for many construction businesses which only occasionally need to deal with asbestos.

Further details are available on the HSE and HSENI websites.

Other licences and registrations

The Construction Industry Scheme (CIS) sets out tax rules for builders who pay sub-contractors to do construction work that falls within the scheme. The rules require these contractors to register with HM Revenue and Customs (HMRC). Sub-contractors don't have to register, but if they do they can avoid having the higher rate of tax deducted from their payments from contractors. There is more information about the CIS on the HMRC section of the Gov.uk website.

Skips placed on a public highway require a Skip Permit from the local authority. Certain conditions may be attached to the licence. Normally the skip hire company will arrange the necessary licences, but it is worth making certain of this.

Before erecting a scaffold on or over a public highway, you are obliged by law to obtain a permit from your local highway authority. Some local authorities also require you to obtain a scaffolding permit before putting up a scaffold in a public place. If you use a specialist scaffolder, they will often take responsibility for arranging any scaffolding permits needed. For more information, contact your local authority planning department or environmental health department.

If your business operates goods vehicles with a gross plated weight of more than 3.5 tonnes (or an unladen weight of more than 1,525 kg for unplated vehicles) then it will need a goods vehicle operator licence in England, Scotland and Wales. A 'restricted category' licence should be sufficient. In Northern Ireland you may need a goods vehicle operator's licence from the Transport Regulation Unit (TRU) of the Department for Infrastructure (DfI). More information about goods vehicle operator licensing is available on the Gov.uk website - and from the DfI in Northern Ireland.

Some specialist types of work have specific licensing requirements. For example, plumbers and heating engineers who install and service gas appliances must be registered with the Gas Safe Register. Electricians who work in domestic premises need to be approved if they want to be able to self-certify notifiable work under Part P of the Building Regulations. Trade associations can be a good source of information about specific licences that you may need for certain types of work.

Selling general insurance, including some warranties

If you offer an insurance backed warranty - even if you make no extra charge for this - then you may be covered by general insurance legislation administered by the Financial Conduct Authority (FCA). Businesses whose activities are covered by the legislation need to be either directly authorised by the FCA or an 'appointed representative' of a principal FCA authorised insurer. It's worth noting that the National House Building Council (NHBC) Buildmark warranty scheme isn't covered by this requirement.

Plant operator skills card

Although it's not mandatory for operators of plant machinery to hold a skills registration card, it's a good way of showing that your business complies with the requirement under the Health and Safety at Work Act for plant operators to be suitably trained. More and more contractors, clients and sites only permit plant operatives who hold a valid skills registration card or 'ticket'.

There is a small charge for each card issued, plus of course the cost of the training itself. Training costs vary depending on the individual's experience, the nature of the particular qualification and the provider.

The industry training board CITB offers one of the best known card schemes, the Construction Plant Competence Scheme (CPCS). You can find out more about the CPCS on the CITB website.

Building Regulations

This is a general term for different pieces of legislation in England and Wales, Scotland and Northern Ireland. The work that you do must comply with local Building Regulations - your local authority building inspectorate will be able to give you more information. The Building Regulations documents themselves are available from the Planning Portal website. More information about the Building Regulations in Northern Ireland is available on the Department of Finance (DoF) website.

Asbestos

Any work that you do which might lead to exposure to asbestos is covered by the Control of Asbestos Regulations. For example, you might be asked to remove and replace an old sheet asbestos roof. Under these Regulations, you may need a licence if you intend to carry out work involving asbestos. More information about asbestos regulations is available on the Health and Safety Executive (HSE) and Health and Safety Executive Northern Ireland (HSENI) websites.

Even if you don't anticipate undertaking any licensable work with asbestos, you still have duties under asbestos control regulations to ensure that people are protected from the risk of exposure to asbestos.

The environment

Environment protection legislation covers waste, pollution control and other aspects of environmental management and makes provision for the handling and disposal of building and demolition waste. Special provision is made for hazardous waste products.

Note that under controlled waste legislation you will require a certificate of registration (upper tier - or the equivalent in Scotland) for any vehicles that you use to transport building and demolition waste. These certificates are available from your local authority.

The Gov.uk website includes guidance for businesses on many different aspects of environmental management.

Health and safety legislation

Building is potentially a hazardous activity and it is very important that you keep up to date with health and safety regulations.

The Health and Safety at Work Act and the numerous regulations made under it cover all aspects of health and safety. The health and safety aspects of construction based activities are specifically covered by the Construction (Design and Management) Regulations. You can find out more about these regulations and read guidance on health and safety in the construction industry on the HSE website.

Employers have a duty to ensure the health and safety at work of all their employees. Those with five or more employees must prepare a written health and safety policy statement. Some key areas where health and safety regulations affect your business, particularly if you employ staff, include:

  • use of electrical equipment (power tools and so on)
  • access to first aid equipment
  • adequate provision and use of protective clothing and equipment
  • reporting of any accidents at work
  • working at height (the Work at Height Regulations apply to both employers and self-employed workers)

Health and safety legislation requires operators of machinery like construction plant to be properly trained and qualified. Skills registration card schemes like the Construction Plant Competence Scheme (CPCS) run by CITB enable employers to show that their plant operators are properly qualified. You can find out more about the CPCS on the CITB website.

You must comply with workplace health and safety and fire safety legislation.

Employment legislation

Anyone employing staff must comply with employment legislation. Important areas of legislation include:

Recruitment and employment contracts

Pay and pensions

Working time: hours, leave, flexible working

Employment policies

Sickness and sick pay

Maternity, paternity and adoption

Discrimination

Managing home workers, remote workers, lone workers

Discipline and grievance

Dismissals and redundancies

Employment tribunals

Fair trading

Special consumer protection regulations require all traders to act honestly and fairly towards their customers. It goes without saying that you shouldn't make claims that aren't true, pressure customers into signing up to things they don't need, or quote prices that turn out to be wildly inaccurate. Detailed information about consumer protection legislation is available on the Trading Standards Business Companion website. Information is also available on the Gov.uk website.

Miscellaneous legislation

Special rules exist for ensuring that rubbish skips are properly marked and are not a hazard to motorists and other road users. These are set out by the Builders Skip (Markings) Regulations. Your local authority highways department should be able to advise you on the requirements.

Where to get help

The 'employing people' section of the Gov.uk website includes information and guidance on all aspects of employment legislation. Information for businesses in Northern Ireland is available on the NI Business Info website.

Further information and guidance leaflets on all aspects of health and safety are available on the HSE website and from your local authority environmental health department. Your local authority will also be able to advise you on such matters as asbestos, controlled waste licences and marking rubbish skips correctly.

Insurance for a builder

When you start up in business you will need insurance cover. Contact an insurer and explain to him or her exactly how the business will operate - the insurer will then recommend what cover you should have. This might include:

  • employer's liability
  • public liability
  • contractor's liability/contractor's all risks
  • unfixed materials, plant and equipment on site
  • combined property
  • business interruption
  • motor insurance (for business vehicles)
  • personal cover - accident and injury, loss of earnings and so on

When taking out personal and employer's liability cover it is particularly important to give precise details of the types of activity that you and your staff will be engaging in. Be prepared to answer questions about the height at which you will be working, the type of equipment you will be using and so on.

Some professional associations and 'approved contractor' schemes require all participating businesses to have a minimum level of public liability insurance, for example £2 million.

Business insurance policies for construction firms can be very costly and it would be a good idea to get some quotes at an early stage in your planning. Shop around to obtain the best cover at the most affordable price. Some trade associations for the construction industry have negotiated special insurance packages for their members. For example, the Federation of Master Builders (FMB) offers its members a package of specialist business insurances at competitive rates through FMB Insurance Services (Build Assure). You can find out more on the FMB website.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.