Construction industry scheme
Guidance on what the Construction Industry Scheme (CIS) is, who is affected and what your responsibilities are.
what is cis?
what is cis work?
CIS is a tax deduction scheme introduced by HMRC where contractors are required to deduct tax from a subcontractor’s pay and send this to HMRC.
The Construction Industry Scheme covers most types of construction work carried out in the UK, including work on buildings and structures such as offices, homes, roads, bridges and industrial facilities. Below are examples of the types of work covered under CIS:
Site preparation work including clearing land for construction, excavation or earth-moving
Construction work including building new structures, alterations, extensions, repairs, demolition and dismantling
Installation work including installing systems such as heating, lighting, water, ventilation, power systems, drainage or similar infrastructure
Decorating and finishing works including painting, plastering, tiling or decorating a structure
Cleaning the inside of buildings after construction work
what do i need to do?
This will depend on whether you are a contractor or subcontractor. You may even be both.
Contractors need to:
Register as a contractor with HMRC
Verify your subcontractors with HMRC before you pay them
Deduct tax at 20% for registered subcontractors, 30% for unregistered subcontractors or 0% if they have gross payment status
Deduct the relevant rate of CIS from the subcontractor’s invoice, after taking away costs for materials, equipment hired, fuel for equipment, and VAT. CIS is deductible from travel and accommodation costs.
File monthly CIS returns to HMRC
Provide your subcontractors with a payment and deduction statement at the end of each tax month
Sub-contractors need to:
Register as a subcontractor with HMRC
Provide your name, national insurance number and UTR to the contractor
Provide an invoice for your labour and any costs you have incurred whilst carrying out the job, such as materials you have paid for, or travel expenses
Report the total amount of tax deductions suffered in the year to HMRC at the end of the tax year
Deadlines
Contractors need to file monthly CIS returns with HMRC by 19th of every month following the last tax month, payment is due the same day if paying by post or by 22nd if paying online.
Need more information?
If you have any questions about CIS, what you need to do, or anything else, contact us.