What Is the Construction Industry Scheme (CIS)? A Targeted Guide for UK Businesses

The Construction Industry Scheme (CIS) sets out framed requirements for how contractors in the UK must manage payments to subcontractors. Administered by HM Revenue & Customs (HMRC), CIS addresses tax compliance directly within the construction sector.

It applies to businesses that pay subcontractors to complete construction-related tasks—whether structural work, site preparation, or finishing trades.

Speak to one of our accountants today on 01483 418863 or complete a contact form below

More about CIS Contact Us


Contractors must register for CIS and verify each subcontractor with HMRC before making deductions from payments. These deductions, either 20% for registered subcontractors or 30% for unregistered ones, go directly to HMRC and count as advance payments towards the subcontractor’s income tax and National Insurance.

Who Must Register for the Construction Industry Scheme?

Registration under the Construction Industry Scheme (CIS) depends on the role your business plays in the supply chain.

Contractors Paying Subcontractors

Any firm or individual that pays subcontractors for construction work falls under the contractor category, and must register for CIS before making those payments.
This includes:

Traditional construction companies hiring self-employed tradespeople or other businesses;

Property developers managing builds with outsourced labour;

Businesses from any sector that carry out construction work and pay others to do it on their behalf.

Subcontractors Receiving Payments

HMRC uses your registration status to apply one of the following deduction rates: 20% (standard), 30% (unregistered), or 0% (gross payment status).

Registration not only confirms your status but also simplifies how payment deductions and reporting are handled.

Without it, contractors must deduct a higher rate of tax—30%—from your payments.

Non-Construction Businesses Doing Significant Construction

Some businesses operate outside the construction sector but still get drawn into CIS due to the scale of their building activities.

If your business spends more than £1 million on construction-related operations in any rolling three-year period, it must register as a contractor—even if construction isn’t your core activity.

Failing to register once the £1 million threshold has been crossed will put the business in breach of HMRC’s CIS rules. Monitoring total construction spend across all departments is the only reliable method for staying compliant.

How can JML accountancy help?

  • Register you as a contractor or subcontractor with HMRC
  • Verify subcontractors with HMRC before making payments
  • Advise on your CIS status and whether you need to register
  • Prepare and submit your monthly CIS returns to HMRC on time
  • Help you avoid penalties for late or incorrect returns
  • Ensure the correct deduction rates are applied (20%, 30%, or gross
    payment status)
  • Apply for and maintain gross payment status where eligible
  • Calculate CIS deductions accurately on every payment
  • Ensure payments to subcontractors are processed correctly within the scheme
  • Supply deduction statements (payment and deduction certificates) to your subcontractors
  • Reclaim CIS deductions suffered if you’re a subcontractor
  • Keep your CIS records, accounts, and paperwork in order
  • Maintain accurate records of all payments made to subcontractors
  • Reconcile CIS deductions with your tax liabilities
  • Advise on whether workers should be classified as employed or self-employed under CIS
  • Keep you up to date with any changes to CIS rules and regulations
  • Help you understand your obligations as a contractor, subcontractor, or both
  • Advise on VAT reverse charge rules for construction services
  • Support you through any HMRC CIS compliance checks or investigations
  • Integrate CIS with your payroll where you have both employed and subcontracted workers
Construction Industry Scheme CIS Accountancy

Contact one of our accounting team today. We have the specialist knowledge in this area. You can either complete a contact form (and we will call you back) or call us.

Complete Form Call Us

Our Reviews

More Services from JML

  • Payroll

    Payroll burning up your time and energy? Eliminate the stress of payroll and focus on…

  • Management Accounting

    Management Accounting Services for Surrey & Hampshire Businesses Tired of financial confusion, cash flow crises,…

  • Xero Accountants

    Take Control of Your Finances with our Certified Xero Accountants for Growing UK Businesses Streamline…

  • Bookkeeping

    Searching for Bookkeepers with Expertise? Surrey Bookkeeping Services from JML Is your business positioned to…

  • Tax Returns

    Tax Returns Service Accurate, Timely, HMRC-Compliant Tax Filing for Surrey & Hampshire From £225 +…