Construction Industry Scheme (CIS)

Helping you find your way through the requirements for the Construction Industry Scheme (CIS)

Rosemary Bookkeeping Services Northampton

What is the Construction Industry Scheme (CIS)?

Under the Construction Industry Scheme (CIS), contractors deduct money (20%) 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 don’t have to register, but deductions are taken from their payments at a higher rate (30%) if they’re not registered.

You can get more information about the Construction Industry Scheme at

If you are registered under CIS, you will need to file monthly returns and keep full CIS records, you may get a penalty if you don’t.

Do you count as a contractor or subcontractor?

You must register as a contractor if you either:

  • pay subcontractors for construction work
  • your business does not do construction work but you have spent more than £3 million on construction in the 12 months since you made your first payment

Construction Industry Scheme (CIS)

Rosemary Bookkeeping can help you complete your monthly return so that at the end of the financial year all information required by HMRC will have been submitted.

Construction Industry Scheme (CIS) covers all construction work carried out in the UK, including jobs such as:

  • site preparation
  • alterations
  • dismantling
  • construction
  • repairs
  • decorating
  • demolition

The UK includes UK territorial waters up to the 12-mile limit.

The scheme doesn’t apply to construction work carried on outside the UK. However, a business based outside the UK and carrying out construction work within the UK is within the scheme and must register accordingly.

The scheme covers all types of businesses and other concerns that work in the construction industry, including:

  • companies
  • partnerships
  • self-employed individuals

These businesses can be:

  • contractors
  • subcontractors
  • contractors and subcontractors

Under the scheme, the terms ‘contractor’ and ‘subcontractor’ have special meanings that cover more than is generally referred to as ‘construction’.

If you are unsure if you should register for the Construction Industry Scheme (CIS), need to know how it will effect your bookkeeping, need help registering or ongoing assistance with returns, contact your local Rosemary Bookkeeper to see how we can help.