Construction Industry Scheme – CIS


Under the Construction Industry Scheme (CIS), Contractorsdeduct money from a Subcontractor’s payments and pass it on to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the Subcontractor’s tax and National Insurance. Contractorsmust register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.


Who counts as a Contractor or Subcontractor?

Register as a Contractor if either:

  • You pay Subcontractors for construction work;
  • Your business doesn’t do construction work but you spend an average of more than £1 Million a year on construction in any 3-year period.

Register as a Subcontractor if you do construction work for a Contractor.

You must register as both if you fall under both categories. 


What work is covered by CIS?

CIS covers construction work to:

  • a permanent of temporary building or structure;
  • civil engineering work like roads or bridges.

For the purpose of CIS, construction work includes:

  • preparing the site, e.g. laying the 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.

Are there any exceptions?

You don’t 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 a construction site that does not involve construction – e.g. running a canteen or site facilities.

The CIS guide for contractors and subconstractors has more detail on what is and what is not covered by the scheme.


What if my business is based outside of the UK?

The same CIS rules apply if your business is based outside of the UK, but you do construction work as a Contractor or Subcontractor in the UK.