If you are self-employed and do construction work for a contractor, you should register for CIS as a subcontractor. It is not compulsory, but if you do not register, contractors must deduct 30% from your payments instead of 20%. Registering is free and takes a few minutes.
## What is the Construction Industry Scheme (CIS)?
CIS is an HMRC scheme for the construction industry. Under it, a contractor takes money off a subcontractor's payments and sends it to HMRC. Those deductions count as advance payments towards the subcontractor's Income Tax and National Insurance.
Two terms matter:
- A contractor is a business that pays subcontractors to carry out construction work.
- A subcontractor is a business or self-employed person who does construction work for a contractor.
You can be both at once. If you work for a main contractor and also pay your own subcontractors, you register as both. See registering for CIS as a contractor.
Do I have to register for CIS as a subcontractor?
No. Registering for CIS is not a legal requirement. But it is almost always worth doing.
If you are registered, a contractor deducts 20% from your payments. If you are not registered, they must deduct 30%. Either way the money goes to HMRC as advance payments towards your tax, so not registering simply means more of your cash is held back until you file your tax return.
CIS only applies when a contractor pays you for construction work. If you work only for private householders who are not contractors, CIS does not apply to that work.
Registering as self-employed and registering for CIS are not the same thing
These are two separate steps, and people mix them up.
If you are self-employed you must register with HMRC for Self Assessment so you can file a tax return. That is the legal requirement. Registering for CIS is an extra, optional step on top, and it is what lowers your deduction rate from 30% to 20%.
You can sort both when you set up. See registering as self-employed in construction for the first step and CIS registration and verification for the second.
How much is deducted: registered, not registered, or gross
The rate a contractor takes off depends on your CIS status.
| Your CIS status | Deducted from your payments |
|---|---|
| Gross payment status | 0% |
| Registered (standard rate) | 20% |
| Not registered | 30% |
These deductions are not an extra tax. They are advance payments towards your Income Tax and National Insurance. When you file your Self Assessment, HMRC sets the deductions against your bill, and many subcontractors are owed a refund. See filing Self Assessment with CIS deductions.
What counts as construction work under CIS?
CIS covers most construction work done in the UK. That includes building, site preparation, demolition, alterations, repairs, decorating, and civil engineering such as roads and bridges. It also covers installing systems like heating, lighting, power, water and ventilation.
Some work is outside CIS, including architecture and surveying, scaffolding hire with no labour, carpet fitting, and delivering materials. Work that is clearly not construction, such as running a canteen on a site, is also outside it.
If you are not sure whether your work counts, check the full list on gov.uk before you assume.
How do I register for CIS as a subcontractor?
- Register as self-employed with HMRC for Self Assessment, if you have not already. You will be given a Unique Taxpayer Reference (UTR).
- Register for CIS as a subcontractor through your HMRC online account, using your UTR and National Insurance number.
- Give your UTR (and company details if you work through a limited company) to every contractor you work for. They verify you with HMRC, which confirms your 20% rate.
The step-by-step, including verification, is in CIS registration and verification.
What is gross payment status, and should I apply?
Gross payment status means contractors pay you in full, with no deductions. You then pay all your Income Tax and National Insurance through Self Assessment as normal. It is good for cash flow, but you have to qualify and stay compliant.
To get it, you must pass three tests:
- Turnover test: your net construction turnover (your construction income, excluding VAT and the cost of materials) is at least £30,000 in the last 12 months. For a partnership or company this is £30,000 for each partner or director, or you can use an alternative whole-business test of £100,000.
- Business test: you do construction work, or provide labour for it, in the UK and run the business through a bank account.
- Compliance test: your tax returns and payments are up to date.
If your turnover is growing, it is worth considering. If you slip behind on tax, HMRC can remove the status.
Common questions
Is registering for CIS the same as registering as self-employed?
No. Registering for Self Assessment is a legal requirement once you are self-employed. CIS registration is a separate, optional step that lowers your deduction rate from 30% to 20%.
Will I get my CIS deductions back?
Often, yes. The deductions are advance payments, not a final tax. When you file your Self Assessment, HMRC sets them against your Income Tax and National Insurance, and if too much was taken you get a refund.
Do I need to register for CIS if I only work for homeowners?
Usually not. CIS applies when a contractor pays you for construction work. Work paid for directly by private householders is outside the scheme.
What rate applies before a contractor verifies me?
If you are registered for CIS, 20%. If HMRC cannot match your details, or you have not registered, 30%. With gross payment status it is 0%.
Do limited companies register for CIS too?
Yes. Sole traders, partnerships and limited companies can all register as CIS subcontractors, and the deduction rates are the same. Which structure suits you is a separate question, covered in sole trader vs limited company.
Last updated: June 2026
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