Quick facts

CIS subcontractors —four key facts.

The CIS scheme has rules. Some cost you, some pay you. Knowing which is which is the whole game. Four things worth knowing.

  1. You're probably owed a refund.

    Contractors deduct tax at source, but only on account of your liability. Once expenses go in, you're often owed far more back than you think.

  2. Registering cuts your deduction rate.

    Register under CIS and less tax comes off your payments. Don't, and more does. You may also be able to register for no deductions!

  3. Registration requirements.

    You must register under CIS and as self-employed.

  4. Good records are money.

    Poor paperwork leads to smaller refunds or even HMRC challenges.

Who we help

CIS subcontractorsthat we help.

On the tools and on CIS? You're in the right place.

Bricklayers, roofers, groundworkers, scaffolders, sparkies, plumbers, plasterers, carpenters, painters and decorators, bathroom and kitchen fitters. Whatever the trade, we know the scheme.

What nobody tells you

The CIS realitiesnobody warns you about.

Working under CIS adds pressures most people never see. The tax comes off first, the paperwork lands on you, and nobody's checking whether you're getting back what you're owed. We are.

  1. Your money's reduced before it arrives.

    Deductions at source mean cashflow's tight all year, whatever the job's worth on paper.

  2. Every missed expense is cash you've given away.

    Mileage, tools, protective gear, materials and more. Subbies routinely lose hundreds a year by not claiming properly.

  3. Your records decide your refund.

    Lost receipts and incomplete logs mean a smaller refund. Sometimes it means unwanted HMRC questions.

  4. Gross payment status keeps the cash in your hands.

    Meet the criteria and contractors pay you in full, no deduction. Most subbies never check if they qualify.

  5. Refunds run on preparation, not luck.

    The cleaner your paperwork and the earlier you file, the faster the money lands. It's that simple.

  6. You might have outgrown sole trader status.

    Past a certain income, going Ltd can cut your tax and let you retain profit. Many never look, we will.

What is CIS

The Construction IndustryScheme, explained.

Under CIS, contractors must deduct tax from payments they make to subcontractors. These rules exist to prevent fraud and ensure HMRC receives tax from construction-related work.

Covered by CIS

Construction work covered by CIS includes:

  • 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

Exceptions

You don't have to register if you only do:

  • 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 is clearly not construction — for example, running a canteen or site facilities

How it works

How the CIS systemactually works.

Generally CIS tax is applied to labour rather than materials, although there are a few minor exceptions to be aware of.

Contractors must decide for each job whether you're self-employed or employed for every contract. If self-employed, your payments fall under one of three tax treatments.

  1. 01

    Gross Payment Status

    No deduction where you are registered for gross payment status.

  2. 02

    Standard Rate Deduction

    Where you are registered as a subcontractor.

  3. 03

    Higher Rate Deduction

    Where you are not registered as a subcontractor.

The amount is paid to HMRC by the contractor on account of your tax liability. It is not your actual liability, just a payment on account — which is often an overpayment when all possible deductions are claimed, and so results in a refund at the end of the tax year.