18/07/2026
CONSTRUCTION INDUSTRY SCHEME (CIS): DO YOU KNOW YOUR DUTIES?
CIS exists to counter tax evasion in construction. Contractors must deduct tax at source from payments to subcontractors — at a rate HMRC sets, not one you choose. If your construction spend passes £3m in any 12 months, you're a "deemed contractor" too.
IF YOU'RE THE CONTRACTOR:
• Verify every new subcontractor with HMRC before paying them
• Deduct at source, at the rate HMRC confirms
• Pay HMRC monthly (14 days after month-end, or 17 if paying electronically)
• Report every payment via RTI
• Check employment status first — employees go through PAYE, not CIS
IF YOU'RE THE SUBCONTRACTOR:
• Register with HMRC as self-employed to avoid the higher deduction rate
• Apply for gross payment status to be paid in full (3 tests apply)
• Keep your records current — bank statements, invoices, business details
• File CIS, Self-Assessment, PAYE and VAT on time
• Don't leave it late — HMRC won't accept applicants who tidy up their tax affairs right before applying
WHAT GETS DEDUCTED:
0% – Gross payment status (paid in full)
20% – Registered subcontractor
30% – Unregistered / can't be matched
GROSS STATUS - 3 TESTS (all required):
1. Business – genuine UK construction business
2. Turnover – £30,000+ (individuals) or £100,000+ (partnerships/companies)
3. Compliance – clean 12-month filing/payment record
Call now to connect with business.