Construction Industry Scheme (CIS) Basics

What is the Contrustion Industry Scheme (CIS)?

In the Construction Industry Scheme (CIS), contractors deduct money from subcontractors‘ payments and pass it on to HM Revenue and Customs (HMRC). Subcontractor deductions count as advance payments towards the subcontractor’s taxes and NI.

Contractors must register for the scheme. Subcontractors are not required to register, but if they aren’t, deductions are taken from their payments at a higher rate.

What is the difference between a contractor and a subcontractor?

You must register as a contractor if either:

  • 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

If you do construction work for a contractor then you will need to register as a subcontractor .

What types of work are covered by the Construction Industry Scheme (CIS) ?

The Construction Industry Scheme covers most construction work to:

  • a permanent or temporary building or structure
  • civil engineering work like roads and bridges

CIS considers construction work to be:

  • 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


Some jobs do not require registration, such as:  

  • 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

The CIS guide for contractors and subcontractors provides more details on what is and is not covered by the scheme.

What to do if your business is based outside of the UK

The same CIS rules apply if your business is based outside the UK, CIS rules apply if your business is not based in the UK, but you perform construction work as a contractor or subcontractor in the UK. 

For more information about registering and paying tax, click here.  

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