The UK Rules
'Follow the Regulations'
Construction Industry Scheme

Construction Industry Scheme (CIS)

The Construction Industry Scheme is one of the special tax deduction schemes. As a rule, tax gets deducted at source from CIS payments relating to building work.

CIS RULES: This guide explains what the Construction Industry Scheme is and how it works.

Specific types of work gets covered by the scheme. Some workers will need to check if they should register as a contractor or subcontractor.

Contractors will deduct money from the payments made to a subcontractor. They will then pass them on to HM Revenue and Customs.

These deductions count as advance payments under the CIS scheme. In this case, it helps to cover tax and National Insurance for subcontractors.

All contractors must register and follow the Construction Industry Scheme rules. There is no such requirement for subcontractors to join the scheme. But, those who are not registered will have tax deductions taken from their payments at a higher rate.

CIS Registering as a Contractor or Subcontractor

You must register as a contractor if either of these apply to you:

  1. You make payments to subcontractors for construction work.
  2. Your business does not carry out construction work. But, you spend than £1 million a year (on average) on construction in any 3-year period.

You can register as a subcontractor if you carry out construction work for a contractor.

Note: If your situation falls into both categories you should register for both.

Construction Industry Scheme Works

As a rule CIS will cover most construction work related to:

In more detail, CIS construction works will include:

Exemptions from CIS Registration

There are certain jobs that get exemptions from Construction Industry Scheme registration. You will not need to register for CIS if you only do work like:

Note: Check the government 'CIS guide for contractors and subcontractors'. The publication has further details on what the scheme covers.

CIS Business Based Outside the United Kingdom

The Construction Industry Scheme (CIS) covers construction work conducted in the UK. But it also applies to some work based abroad. There are different registration processes for sole traders, partnerships and companies.

You should check how to register and pay tax if this situation applies to you.

Construction Industry Scheme (CIS) for Business Tax Payments