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.
Information in this help guide focuses on the responsibilities and obligations for Construction Industry Scheme contractors and subcontractors.
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.
The deductions count as advance payments under CIS scheme rules. Thus, 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.
Note: A different section explains what you must do as a Construction Industry Scheme (CIS) subcontractor.
CIS Registering as a Contractor or Subcontractor
You must register as a contractor if either of these apply to you:
- You make payments to subcontractors for construction work.
- 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.
Note: You can register as a subcontractor if you carry out construction work for a contractor. 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:
- A building or structure that is temporary or permanent.
- Different types of civil engineering work such as constructing roads and bridges
In more detail, CIS construction works will include:
- Preparation of the site (e.g. providing access works and laying foundations).
- Demolition work and dismantling.
- Building work, including alterations, repairs, finishing, and decorating.
- The installation of systems for heating, lighting, power, water, and ventilation.
- Cleaning inside buildings following the completion of construction work.
Follow UK Rules for 2019 Updates!
Note: A different section explains what you must do as a Construction Industry Scheme (CIS) contractor.
CIS Scheme Exemptions for Registration
There are certain jobs that qualify as Construction Industry Scheme exemptions and do not require registration. You will not need to register for CIS if you only do work like:
- Architectural work and surveyance.
- Scaffolding hire (without labour).
- Carpet fitting.
- Manufacturing materials that get used in construction (includes plant and machinery).
- Deliveries of construction materials.
- Jobs on site but it is clear that they do not relate to construction (e.g. running site facilities or a canteen).
Note: Check the government 'CIS 340 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.
Check how to register and pay tax through the CIS scheme for businesses based outside the UK if this situation applies to you.
ALSO IN THIS SECTION
Construction Industry Scheme Contractor
CIS contractors pay subcontractors for carrying out construction work. Besides registering with HMRC, and filing monthly returns, check what you must do as a CIS contractor.
Construction Industry Scheme Subcontractor
CIS subcontractors get paid by contractors for doing all kinds of building work. Besides registering with HMRC, check what you must do as a CIS subcontractor in United Kingdom.
Construction Industry Scheme Online Service
You can sign up or log in to use the Construction Industry Scheme online service. It is useful for filing contractor monthly returns or for verifying a subcontractor.
Pay CIS Late Filing Penalty
There is a penalty for the late filing of Construction Industry Scheme (CIS) monthly return. Find out how to pay a CIS late filing penalty and the different methods of payment.
Construction Industry Scheme (CIS) for Business Tax Payments