Construction Industry Scheme

What is CIS? CIS is an abbreviation for the Construction Industry Scheme.

This is a set of rules laid out by HMRC about collecting income tax from those who work in and around the building industry as subcontractors rather than employees.

How it Works

There are many subcontractors that form small businesses, especially sole traders in the construction industry. If you are a subcontractor in this industry it is necessary to register with HMRC. If you own a limited company and plan on using subcontractors that aren’t employees, it is vital to register first with CIS.

If you are using a subcontractor who is CIS registered, it is your responsibility to account for their tax. Industry specific tax rates are deducted for the varied CIS statuses of subcontractors.

The general types of work that fall under CIS are: groundwork, general building (bricklaying, plastering, roofing etc.), alterations, repairs and demolition.

A construction contract will contain the rules outlined in CIS and apply to all payments made by a contractor to a subcontractor. Non-compliance with the scheme can lead to extensive penalties.

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Key Benefits
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