Construction Industry Scheme (CIS)

Self-employed individuals in the construction trade pay tax under the Construction Industry Scheme (CIS). Under the CIS, contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

The CIS covers following construction trades:

  • preparing the site – for example, 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

CIS Registration

Contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at a higher rate if they are unregistered. The CIS rules mean that the contractor is usually obliged to withhold tax on its payments to you, at either 20% if you are ‘registered’ or 30% if you are ‘unregistered’.

DD Chartered Accountant helps self-employed individuals in the construction trade in meeting Construction Industry Scheme (CIS) requirements. We can guarantee every CIS return is filed on time.

Construction Contractor Registration

  • you pay subcontractors for construction work
  • your business does not do construction work, but you have spent more than £3 million on construction in the 12 months since you made your first payment

Construction Subcontractor Registration

  • Register as a subcontractor if you do construction work for a contractor

One must register for both if they fall under both categories.

Exceptions under CIS

You do not have to register if you only do certain jobs, including:

  • 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 – for example, running a canteen or site facilities

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