Under the Construction Industry Scheme (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.
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’re not registered.
If you’re already registered as a contractor, you can sign in to CIS online to file your monthly returns or to verify a subcontractor.
Register as a contractor if either:
Every company, including dormant and non-trading companies, must file a confirmation statement at least once every year. This confirms the information we hold about your company is up to date.
You must file a confirmation statement even if there have not been any changes to your company during the review period.
From 5 March 2024, you will also need to state that the intended future activities of the company are lawful.
Companies House may issue a financial penalty, and your company may be struck off the Companies House register if you do not file your confirmation statement.
CIS covers most construction work to:
• a permanent or temporary building or structure
• civil engineering work like roads and bridges
• 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
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
The CIS guide for contractors and subcontractors has more detail on what is and is not covered by the scheme.
The same CIS rules apply if your business is based outside the UK, but you do construction work as a contractor or subcontractor in the UK. Read guidance about how to register and pay tax if your business is based outside of the UK.