The Construction Industry Scheme (CIS) is a tax deduction scheme which involves tax being deducted at source from payments that relate to construction work. It is unique to the UK and is administered by the HM Revenue & Customs (HMRC).

The (CIS) covers all construction work carried out in the UK, including jobs such as site preparation, alterations, dismantling, construction, repairs, decorating and demolition. It applies to all businesses that operate in the construction industry, including contractors, subcontractors, and self-employed workers.

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Under the scheme, contractors deduct 20% from a subcontractor's payments and pass it to HMRC. If you do not register for the scheme, contractors must deduct 30% from your payments instead.  These deductions count as advance payments towards the subcontractor's tax and National Insurance. Contractors must register for the scheme, but for subcontractors, it's optional.

If you do not want deductions to be made in advance by contractors, you can apply for ‘gross payment status’.

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You are probably a Contractor if you: 

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Work within the construction industry, and therefore are required to be CIS registered:

• Need to complete CIS monthly returns.

• Run your business for yourself and take responsibility for its success or failure.

• Have several customers at the same time.

• Can decide how, where and when you do your work.

• Can hire other people at your own expense to help you or to do the work for you.

• Provide the main items of equipment to do your work.

• Are responsible for finishing any unsatisfactory work in your own time.

• Charge an agreed fixed price for your work.

• Sell goods or services to make a profit.

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What you are required to do:

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• Register as self-employed with HM Revenue and Customs (HMRC) to make sure you pay the correct Income Tax and National Insurance.

• Register as (CIS) contractors with HM Revenue and Customs (HMRC) to make sure you pay the correct construction scheme deductions.

• Keep records of your business income and outgoings.

 

Complete yearly tax return: 

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Depending on your tax status you could be entitled to a tax rebate, or you may have to pay your tax each year.

 

To register for the Construction Industry Scheme (CIS) you’ll need:

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• your legal business name - you can also give a trading name if it’s different to your business name.

• your National Insurance Number.

• the unique taxpayer reference number (UTR) for your business.

• your VAT registration number (if you’re VAT registered).

• If you’re a subcontractor and a (CIS) contractor (you pay subcontractors to do construction work), you’ll need to register for (CIS) as both.

 

(CIS) Reclaims

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Limited companies that work in the construction industry as a sub-contractor must claim back their (CIS) via their payroll. This is an area not well understood and it costs businesses time and money to put it right if neglected.

 

To claim a (CIS) refund, you’ll need:

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• Company name, phone number, and UK address.

• PAYE reference numbers.

• Company Unique Tax Reference number (UTR).

• The estimated overpayment amounts.

 

We will work with you, whether you are an individual, a partner, or a director, to minimise your tax liability and make sure you adhere to all personal tax filing requirements and deadlines.

Everything is taken care of. We are familiar with your industry and can meet all your UK tax compliance requirements.

 

To cancel or deregister from (CIS):

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If you have stopped trading or using subcontractors, we can contact the HMRC to deregister you from (CIS). You are required to update HMRC about any changes that may affect your (CIS) registration.

This includes:

• Changes to your address and business structure, or the death of a contractor.

• If you stop trading or using subcontractors.

• If you’ve stopped using subcontractors, contact HMRC to deregister from (CIS).

• If this is a temporary change, you can make an inactivity request instead. Make sure you file monthly (CIS) reports until your cancellation request is approved.