# S8. Getting your CIS registration sorted
CIS is how HMRC takes tax off most construction subbies. It doesn't give you rights. It just changes how you're taxed.
If you're going to work "self‑employed" in construction, getting CIS done properly is the bare minimum.
1. THE SHORT VERSION
CIS = Construction Industry Scheme. Contractors knock tax off subbies' pay and send it to HMRC.
You don't have to register as a subcontractor, but if you don't, they usually take 30% instead of 20%.
Registering is mainly about setting yourself up with HMRC properly so you're not over‑taxed and in a mess at year‑end.
2. CIS IN ONE MINUTE
- You're a subcontractor if you do construction work for a contractor (main contractor, bigger firm, or even a business acting as a "deemed contractor").
- Under CIS, the contractor takes 20% (if you're registered) or 30% (if you're not) off your labour pay and sends it to HMRC. It's an advance on your tax and NI, not an extra tax.
- You still have to do a Self Assessment tax return or company accounts later. CIS doesn't do that for you.
3. WHY BOTHER REGISTERING?
If you're working as a subbie and not just on PAYE:
- Registered CIS subbie → normally 20% deducted from labour.
- Unregistered → 30% deductions. Cashflow killer.
- Gross status (0%) → no CIS knocked off, you get paid in full and sort tax later, but you must meet strict turnover and compliance tests.
Bottom line: registration keeps more money in your pocket now and shows HMRC you're playing the game properly.
4. WHAT YOU NEED IN PLACE FIRST
Before you touch CIS, you need to be set up as a business with HMRC.
If you're a sole trader
- Register as self‑employed for Self Assessment and get your UTR (Unique Taxpayer Reference).
- You'll also need your National Insurance number, business name (can just be your own name), and the date you started trading.
If you're a limited company
- Register your company with Companies House.
- Register with HMRC for Corporation Tax, often also as an employer if you pay yourself a salary.
- Then register the company for CIS as a subcontractor.
You can register for Self Assessment and CIS at the same time if you're new.
5. HOW TO REGISTER AS A CIS SUBCONTRACTOR - STEP BY STEP
Step 1 - Get your UTR If you don't have one, register as a new business for Self Assessment and tick that you're working as a subcontractor. HMRC sends your UTR by post. Keep it safe.
Step 2 - Register for CIS You've got a few ways:
Online (best way) Use the HMRC CIS online service or your Government Gateway account. You'll need:
- Legal business name (and trading name if different)
- UTR
- National Insurance number (if you're an individual)
- Company reg number if you're a Ltd
- Date you started trading
By phone You can ring HMRC's CIS helpline (often via 0300 200 3210 or the numbers on GOV.UK) and register that way.
By post If you can't do online, you can use CIS forms like CIS302 for sole traders to register or apply for gross payment.
If you're both contractor and subcontractor (you take on work and pay subbies yourself), you must register as both.
6. GROSS PAYMENT STATUS (0% DEDUCTIONS) - REALITY CHECK
Gross payment sounds great but it's not for everyone.
To get gross status, HMRC checks:
- Turnover – minimum net construction turnover (e.g. around £30k for individuals, higher for partnerships/companies depending on size).
- Compliance – you've been on time with tax returns and CIS/PAYE/NI/VAT payments.
- Business – you run a genuine business, not just a short‑term gig.
If they grant it, you get paid in full and pay tax via Self Assessment or company accounts.
Mess up your returns or payments and HMRC can take it away and put you back on 20%.
For most new subbies, 20% registered CIS is the realistic starting point.
7. WHAT YOUR CONTRACTOR ACTUALLY DOES WITH CIS
Once you're registered:
- They verify you with HMRC (check your UTR and NI/company details).
- HMRC tells them if you're on 20%, 30% or gross (0%).
- They take that percentage off your labour (not normally off materials you've paid for yourself, if invoiced properly).
- They send the deduction to HMRC and should give you a CIS statement each month showing what they've deducted.
You keep those statements - they're proof of tax already paid when you do your return.
8. WHAT CIS IS NOT
CIS gets abused as a label. Remember:
- CIS does not decide your employment status. You can be on CIS and still be a worker/employee in law if you're treated like staff.
- CIS does not give you rights like holiday pay, sick pay or redundancy. Those come from employment status, not tax schemes.
- CIS does not do your tax return. You must still file Self Assessment or company returns and claim back over‑deducted tax if needed.
If someone says "you're CIS so you're self‑employed, end of", that's a red flag.
9. COMMON CIS SCREW‑UPS
Not registering at all You get hammered at 30% deduction instead of 20%.
Thinking CIS = no need to do a tax return CIS is advance tax. If you don't file, you miss refunds and risk penalties.
Not keeping CIS statements HMRC wants proof of deductions. Lose them and it's harder to prove what you've already paid.
Letting someone else "register you" and never seeing the letters You should know your own UTR, CIS status and HMRC login. If an accountant or boss controls it all, you're blind.
Assuming all money is labour Materials you've paid for shouldn't be hit by CIS if invoiced clearly; if everything is treated as labour, you're over‑deducted.
10. QUICK CIS SETUP CHECKLIST
If you're going self‑employed on site:
- Register as self‑employed or set up your company
- Get your UTR
- Register for CIS as a subcontractor - online is easiest. Have UTR, NI, business details ready.
- Ask your contractor what rate HMRC has given you - 20%, 30%, or gross. Don't just assume.
- Keep every CIS statement and invoice - you'll need them for your tax return and to claim back over‑payments.
- Do your tax return on time - if you don't, HMRC fines you and gross status (if you have it) can vanish.
PAYE vs SOLE TRADER vs LIMITED COMPANY - IN ONE GLANCE
| Setup type | What it actually is | Main upsides | Main downsides | Best fits when… |
|---|---|---|---|---|
| PAYE employee/worker | You're on someone else's books. They run payroll, deduct tax/NI and control most of your day. | Holiday pay, minimum wage, some sick pay, redundancy/unfair‑dismissal rights (employee), pension, less paperwork. | Less control over hours and work, limited ability to offset expenses, you can be dropped when work dries up (especially as a worker). | You want stability and rights more than maximum take‑home, or you're early in your career and just want to work and learn. |
| Sole trader | You are the business. You invoice in your own name or trading name and report profits via Self Assessment. | Simple to set up, cheap to run, easy to understand. Good control and you can offset genuine business costs. | No limited liability – debts and claims come straight to you. More tax admin, must save for tax yourself. Fewer big‑client doors open. | You're starting on your own, doing smaller jobs or subby work, and want flexibility without drowning in company paperwork. |
| Limited company (Ltd) | Separate legal entity. You're a director/shareholder, the company earns the money and pays Corporation Tax. | Limited liability, more tax‑planning options, often looks more professional to bigger contractors and agencies. | More admin (Companies House, Corporation Tax, payroll, CIS, IR35). Director duties under Companies Act 2006. Accountant costs. | You're on decent, steady rates, dealing with bigger clients, and ready to handle or pay for the extra admin to protect yourself and plan tax. |
WHAT TO DO NEXT
- Register for Self Assessment and get your UTR if you do not already have one.
- Register for CIS as a subcontractor online through your Government Gateway account.
- Ask your contractor to verify you with HMRC so you are on 20%, not 30%.
- Keep every CIS statement you receive - you will need them at tax return time.
- File your Self Assessment on time every year to avoid fines and protect any gross payment status.
SOURCES
- Finance Act 2004 - Construction Industry Scheme provisions. https://www.legislation.gov.uk/ukpga/2004/12
- Income Tax (Earnings and Pensions) Act 2003. https://www.legislation.gov.uk/ukpga/2003/1
- GOV.UK - What is the Construction Industry Scheme. https://www.gov.uk/what-is-the-construction-industry-scheme
Common questions
What rate should CIS deductions be?
20% if you're registered with HMRC, 30% if you're not, and 0% if you have Gross Payment Status. The contractor verifies your status with HMRC before paying you. If they're deducting 30%, register for CIS today. It's free and the rate drops at the next pay run.
What if my contractor hasn't registered me for CIS?
If they haven't verified you, they must legally deduct 30% by default until they do. Contractors are required to register and verify every subcontractor before paying them. Report a non-registered contractor to HMRC. You can still reclaim the deduction if they give you a CIS statement.
How to Register for CIS guide.
Know someone who needs this?
Need help pricing your work? Read Section 14: Pricing Your Work - day rates, job prices and how to stop underselling yourself.
Finished your apprenticeship? Read our guide: After Your Apprenticeship - the stuff nobody teaches you in college.
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