In short: £125 covers registering your business for the Construction Industry Scheme (CIS) with HMRC, as a contractor, a subcontractor or both. Contractors must register; subcontractors do not have to, but unregistered subcontractors have 30% deducted from payments instead of 20%. We usually submit the registration within 3–5 working days of receiving your details. Monthly CIS returns are not included in this price.
What's included
- Check of whether you are a contractor, a subcontractor or both
- Contractor registration through HMRC's new employer route, where needed
- Subcontractor registration using your UTR
- Submission to HMRC
- Explanation of the deduction rates that will apply
- Plain-English summary of contractor duties: verification, deductions and monthly returns
- Guidance on when gross payment status may be worth applying for
What CIS is
The Construction Industry Scheme (CIS) is HMRC's system for collecting tax in construction. Contractors deduct money from payments to subcontractors and pass it to HMRC. These deductions count as advance payments towards the subcontractor's tax and National Insurance.
CIS covers most construction work in the UK, including building, alterations, repairs, decorating and demolition.
Contractors: registration is mandatory
You must register as a contractor if:
- your business pays subcontractors for construction work, or
- your business is not in construction but spent more than £3 million on construction work in 12 months
To register as a contractor, HMRC uses the same process as setting up as a new employer. Once registered, HMRC sends a letter with the details you need, including your employer PAYE reference. Register before you start paying subcontractors.
Subcontractors: registration is optional but worth it
Subcontractors do not have to register for CIS. But registration affects how much is deducted from your payments:
- Registered (net payment status): 20% deducted
- Not registered: 30% deducted
- Gross payment status: no deduction, if you meet HMRC's conditions
Gross payment status means you receive payments in full and pay your tax through your own returns. HMRC has tests for this, covering your business, turnover and tax compliance. We can explain whether it is worth applying, but HMRC makes the decision.
To register as a subcontractor, you need a Unique Taxpayer Reference (UTR). If you are a sole trader without one, see Self Assessment registration.
Contractors' ongoing duties
Registration is the start. As a contractor, you will need to:
- Verify each new subcontractor with HMRC, so you know which rate to deduct.
- Make the right deduction from each payment for the labour part of the work.
- Pay the deductions to HMRC.
- Give subcontractors a payment and deduction statement.
- File a monthly CIS return by the 19th of each month, covering the tax month that ended on the 5th.
A late monthly return brings a £100 fixed penalty.
Our £125 price covers registration only. We do not file monthly CIS returns as part of it. If you would like ongoing help, see our bookkeeping, VAT and payroll service.
How it works
- Order online and tell us about your work: who pays whom.
- We confirm whether you are a contractor, a subcontractor or both.
- We collect and check the details HMRC needs.
- We submit the registration.
- HMRC confirms the registration, and we explain your next steps.
What you need to provide
- your company name, number and Corporation Tax UTR, or your personal UTR if you are a sole trader
- National Insurance number for sole traders, and for directors where HMRC asks for it
- business address and contact details
- the start date of your construction work, or of paying subcontractors
If your company is new, see our Fully Inclusive Package, which includes PAYE registration.
Common mistakes
- Paying subcontractors before registering as a contractor
- Forgetting to verify a new subcontractor, and deducting the wrong rate
- Missing the 19th-of-the-month deadline for monthly returns
- Assuming a company that does some building work is never a contractor
Tax rules can depend on your exact arrangements. An accountant can advise on your position.
Frequently asked questions
Do I have to register for CIS?
Contractors must register. Subcontractors do not have to, but if they are not registered, contractors deduct 30% from their payments instead of 20%.
What are the CIS deduction rates?
20% for registered subcontractors, 30% for unregistered subcontractors, and no deduction for those with gross payment status.
Can I register as both a contractor and a subcontractor?
Yes. Many construction businesses both pay subcontractors and work for other contractors. We can register both roles.
Are monthly CIS returns included?
No. The £125 covers registration only. Monthly returns are due by the 19th of each month, and we can help through our bookkeeping, VAT and payroll service.
Can you get gross payment status for me?
We can explain HMRC's conditions and help you apply, but HMRC decides whether to grant it.
What do I need to register as a subcontractor?
You need a Unique Taxpayer Reference (UTR). If you are a sole trader without one, register for Self Assessment first.
Related services
Bookkeeping, VAT and Payroll
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Self Assessment Registration (UTR)
We register you for Self Assessment with HMRC so you receive your Unique Taxpayer Reference (UTR).
Fully Inclusive Company Package
Formation, addresses and documents, plus VAT and PAYE registration handled for you.