In this section:
- Contractor registration and obligations
- Subcontractor registration and obligations
- Using or dealing with subcontractor trading names
- Acting as a tax agent for a CIS contractor or subcontractor
- CIS Online login page
Contractor registration and obligations
The Construction Industry Scheme (CIS) is a set of rules for contractors and subcontractors in the construction industry. If you're a CIS contractor (including a deemed contractor), you'll need to register with us. You'll also have to follow certain rules to make sure you pay your subcontractors within the scheme correctly.
The things you'll need to do include:
- verifying your subcontractors with HM Revenue & Customs (HMRC)
- paying your subcontractors in the right way - making deductions if necessary
- paying over deductions to HMRC
- giving subcontractors deduction statements
- sending us monthly returns
- keeping proper records
This guide will help you understand your responsibilities and obligations under CIS if you're a contractor or deemed contractor. It explains when and how to register for CIS, and how to go about following the CIS rules. It also provides links to further guidance on deemed contractor status.
On this page:
- Registering as a CIS contractor
- Checking subcontractors' employment status and verifying them
- Paying subcontractors and making deductions under CIS
- Paying over deductions to HMRC
- Deduction statements and monthly returns
- Record keeping under CIS
Registering as a CIS contractor
All contractors covered by CIS need to register with HMRC. If you're a contractor under CIS you'll need to register with us before you take on your first subcontractor.
CIS uses special definitions of the terms contractor and subcontractor. So we might treat you as a contractor who needs to register even if you don't normally think of yourself as one.
You can register as a contractor by:
- registering as a new employer by email through our website
- calling our New Employers Helpline on Tel 0845 607 0143 (open from 8.00 am to 8.00 pm, Monday to Friday and 8.00 am to 5.00 pm Saturday and Sunday)
- if you're a non UK-resident business, contacting our Centre for Non-Residents on Tel 0115 974 1948
If you register through our website you'll need to put in some details online. The details you'll need depend on the type of business you're registering. But they'll include things like:
- your unique taxpayer's reference
- key individuals' National Insurance numbers
- the registered business name and contact details
Tick the box to show you're going to be engaging construction industry subcontractors. When you submit the online form details will be emailed to us securely.
What happens next?
We'll set up a contractor scheme for your business - and a PAYE (Pay As you Earn) scheme if you asked for one - and send you a contractor's pack. The pack contains all the information and forms you'll need to start working as a CIS contractor.
Register online as a new employer and/or contractor
Check if you're a contractor or subcontractor under the CIS
Decide if your work comes within CIS
Find out what to do if you're a non-resident contractor working in the UK
Checking subcontractors' employment status and verifying them
Before you can pay an individual for work they do under CIS, you'll need to confirm they're properly self-employed and not an employee. You may also need to verify them with us.
Checking employment status
CIS only covers self-employed workers - it doesn't cover employees. So before you pay an individual under CIS you'll need to make sure you haven't engaged them under a 'contract of employment'. Employment status is covered by general law and depends on the terms of your agreement with the worker.
We've got guidance on employment status and a status indicator tool you can use on our website.
Use the employment status indicator
Read guidance on employment status
Verifying subcontractors
You may need to 'verify' a subcontractor with us before you first pay them. This means checking whether they are registered with us, so that we can tell you how to pay them - gross or after making a deduction from their payment.
Generally, if you haven't previously engaged the subcontractor or paid them in the recent past, then you'll need to verify them before you pay them.
Depending on the system you use for CIS, you can verify a subcontractor by:
- calling the CIS Helpline on Tel 0845 366 7899 (open from 8.00 am to 8.00 pm seven days a week)
- using our CIS Online service
- using suitable commercial CIS software
- using Electronic Data Interchange (EDI)
You can access the CIS Online service through our website. You'll need to register for CIS Online for contractors if you haven't already.
Third party CIS software is an alternative to our free online service. We check CIS software to ensure it can work with our own systems. We list the ones that can on our website.
EDI is suitable for large contractors who need to verify a lot of subcontractors each month. You'll need to register to use EDI if you haven't already.
However you verify your subcontractors, you'll need to have certain details about them - and about your own business - to hand.
Read about checking and verifying subcontractors before you pay them
Find out about our CIS Online service
Verify a subcontractor using our CIS Online service
See a list of approved CIS software packages
Obtain the registration form for EDI (PDF 49K)
Paying subcontractors and making deductions under CIS
When we verify your subcontractor we'll tell you how to pay them. This could be:
- gross - with no deductions taken off their payment
- net of a deduction at the standard rate - 20 per cent
- net of a deduction at the higher rate - 30 per cent
We'll tell you to pay a subcontractor gross if they're registered with us to get gross payments.
If the subcontractor's not registered for gross payments, we'll tell you to make a deduction from their payment at the standard rate as long as we could verify them. If we couldn't match the details you gave us for them with our own records, we'll give you a special verification reference and tell you to make a deduction at the higher rate.
Making a deduction
If we tell you to make a deduction before you pay a subcontractor you'll need to work out how much to deduct.
You can read more details about how to make deductions correctly in our guide to paying subcontractors under CIS.
Read about how to pay your subcontractors under the CIS
Paying over deductions to HMRC
You must pay over to us any deductions you make from your subcontractors' payments. You can find out about paying over deductions to HMRC in our guide to paying subcontractors under CIS.
Read about how to pay your subcontractors under the CIS
Deduction statements and monthly returns
As a CIS contractor you are obliged to complete some paperwork whenever you pay subcontractors. The quickest and easiest way to do this is electronically but you can also post your paperwork to us.
Issuing payment and deduction statements
Whenever you make a deduction from a subcontractor's payments you must give them a written payment and deduction statement. You can either do this for each tax month or with each payment. Each statement must include certain details about your business, their business, the payment you made and the amount you deducted.
You can read more about issuing deduction statements in our guide to paying subcontractors under CIS.
Read about how to pay your subcontractors under the CIS
Submitting monthly returns
Each month you'll need to send us a monthly return. This tells us about the payments you've made to all your subcontractors - and any deductions you've made from them. If you haven't made any payments, you'll have to make a 'nil return' to let us know.
The quickest and easiest way to submit your return is electronically - using our CIS Online service, third party software or EDI.
You can find out how to use our online service in our guide to CIS Online.
Read about how to use the CIS Online service
You can read more about how to make your contractor returns in our guide on monthly returns under CIS.
Find out how to make your monthly CIS returns if you're a contractor
Record keeping under CIS
We expect contractors to keep certain records. You'll need to keep details of:
- the gross amount of each payment you make to a subcontractor - excluding any VAT
- the amount of any deduction you made from a payment before you gave it to the subcontractor
- if you made a deduction, the amount of any materials costs - excluding any VAT
We'll check these records from time to time - just like we check employers' PAYE records.
You must keep your records for at least three years after the end of the tax year they're for. If we ask to see them you'll need to make them available and provide any facilities we need to look at them. We may ask you for full sized copies.
You can archive your records on an imaging system like microfiche as long as you keep an unchanged image of the originals.
Download booklet CIS340 'CIS - guidance for contractors and subcontractors'
