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Construction Industry Scheme (CIS)

Construction Industry Scheme (CIS)

Self-employed individuals in the construction trade pay tax under the Construction Industry Scheme (CIS). Under the CIS, contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

The CIS covers following construction trades:

  • 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

CIS Registration

Contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at a higher rate if they are unregistered. The CIS rules mean that the contractor is usually obliged to withhold tax on its payments to you, at either 20% if you are ‘registered’ or 30% if you are ‘unregistered’.

DD Chartered Accountant helps self-employed individuals in the construction trade in meeting Construction Industry Scheme (CIS) requirements. We can guarantee every CIS return is filed on time.

Construction Contractor Registration

Construction Contractor Construction Contractor Registration
  • you pay subcontractors for construction work
  • your business does not do construction work, but you have spent more than £3 million on construction in the 12 months since you made your first payment

Construction Subcontractor Registration

Construction-Subcontractor Registration
  • Register as a subcontractor if you do construction work for a contractor

One must register for both if they fall under both categories.

Exceptions under CIS

You do not have to register if you only do certain jobs, including:

  • 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’s clearly not construction – for example, running a canteen or site facilities

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