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CIS Contractors

The Legislation

Who needs to be registered as a CIS Contractor?

You must be registered as a Construction Industry Scheme (CIS) contractor if:

  • You pay subcontractors to do construction work

  • Your business does not do construction work but you usually spend more than £1 million a year on construction

The definition of construction is very wide including decorating, repairs, and demolition for example. All business to business payments for work done are covered by CIS: only payments made by private householders are not under CIS.

So for example, if you complete some work for a private householder, the money paid to you by the householder is not subject to CIS tax deduction. But if you ask a self-employed colleague to help, then any payments you make to the colleague are subject to CIS. Notice that if the householder pays both workers directly, then CIS would not apply.

HMRC regulations that MUST be followed when you are a CIS contractor:

  • Register for CIS before you take on your first subcontractor

  • Check if you should employ the person instead of subcontracting the work. Penalties can be incurred if the person should be an employee instead

  • Verify your subcontractors with HMRC (checking they are registered as a CIS subcontractor)

  • When you pay subcontractors, you’ll usually need to make deductions from their payments and pay the money to HMRC

  • File monthly returns and keep full CIS payment records

How can we help?

Being a specialist in CIS we have helped CIS contractors with their statutory obligations for a number of years, we can help you with the following so you can maximise your business potential:

  • CIS registration 

  • Checking personnel employment status

  • Verifying your subcontractors with HMRC

  • Registering CIS subcontractors

  • Make monthly deductions from subcontractor payments and pass deduction on to HMRC

  • Send subcontractor payment & deduction statements