CIS stands for the Construction Industry Scheme. It's a special tax scheme just for the construction industry. It affects most construction work done in the UK, from site preparation to repairs, decoration and demolition. There are some exceptions but for most general contractors, the scheme is compulsory.

Under the scheme, the company you are working for (a contractor) will deduct money from your (subcontractor) pay, to cover your tax and National Insurance contributions.

What's a CIS deduction?

A CIS deduction is the money a contractor (your boss) takes from a subcontractor's pay (your pay) before reporting it and paying it over to the HMRC every month.

Do I need to be CIS registered?

If you work in the Construction industry for a company that deduct your tax and you are not employed, then you should be CIS registered to avoid paying an extra 10% tax deduction.

How much is the CIS deduction?

If you are CIS registered, the current rate is 20%, If you aren't registered its 30%, so it's well worth registering!

Why should I register as a CIS subcontractor?

If you do not register under the CIS, you're going to have an additional 10% deducted from all your pay until you are registered. Secondly, you should be aware that not being CIS registered doesn't mean you get to avoid doing a tax return.

Not doing a tax return on time can lead to fines, estimated tax bills and worse of all not getting that additional 10% back!

Estimated bills (called determinations) can be enforced by HMRC, even if you have had tax deducted from you. For the tax you have had deducted to be removed from the estimated tax owed, you need to file a tax return. You really don't want this to happen, some determinations have been known to cost upwards of £10,000!

How can I register for the CIS?

You may already be registered for self-employment, but that does not automatically mean you are registered for CIS, as these are two separate registrations. However, if you are not already registered for self-employment, then you can ask to register for CIS at the same time.

In most cases you can register as self-employed by calling the Newly Self-Employed Helpline on +44 300 200 3504 or on the GOV.UK website.

If you are already registered as self-employed, but still need to register under the CIS scheme, you should call the CIS Helpline.

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