Under the Construction Industry Scheme, contractors deduct money from a subcontractor’s payments and pass it to HMRC. The deductions are normally 20% of the labour element, provided HMRC have been able to verify the subcontractor. The tax deductions count as advance payments towards the subcontractor’s tax and National Insurance.

​

Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate of 30% if they’re not registered. You must register as both if you fall under both categories.

Knowing when to deduct CIS and when to report & pay to HMRC are all key to understanding your obligations. We can discuss your needs and liaise with HMRC on your behalf.

​

Work covered by CIS

​

CIS covers most construction work to:

​

•    a permanent or temporary building or structure

•    civil engineering work like roads and bridges

​

For the purpose of CIS, construction work includes:

​

•    preparing the site, eg laying foundations and providing access works

•    demolition and dismantling

•    building work

•    alterations, repairs and decorating

•    installing systems for heating, lighting, power, water and ventilation

•    cleaning the inside of buildings after construction work

​

Work not classed as construction

​

The following are examples of jobs that do not fall under CIS, so you won’t need to register providing this is all you do:

​

•    architecture and surveying

•    scaffolding hire (with no labour)

•    carpet fitting

•    making materials used in construction including plant and machinery

•    delivering materials

•    work on construction sites that’s clearly not construction, eg running a canteen or       site facilities