How to Register for CIS
A practical guide to the Construction Industry Scheme — who needs to register, how to do it, and what deductions mean for your tax bill.
If you work in the UK construction industry — whether you're hiring subcontractors or working as one — you'll likely need to register for the Construction Industry Scheme (CIS). The scheme requires contractors to deduct tax from payments to subcontractors and pass it to HMRC.
Understanding how CIS works helps you stay compliant, avoid penalties, and make sure you're not paying more tax than necessary.
Who Needs to Register?
If you do construction work for a contractor, you don't have to register — but you should. Without registration, contractors must deduct 30% from your payments. Once registered, the standard deduction drops to 20%, and with gross payment status you can receive payments in full.
How to Register
- You'll need to be registered for Self Assessment first — if you haven't done this yet, see our guide below
- Go to the HMRC subcontractor registration page (link below) and click the green 'Start now' button
- Sign in with your Government Gateway credentials
- You'll need your UTR and National Insurance number
- HMRC will add you to the CIS register and contractors can then verify you
Understanding CIS Deductions
Contractors deduct tax from payments to subcontractors before paying them. The deduction rate depends on the subcontractor's registration status:
- Registered subcontractor — 20% deduction
- Unregistered subcontractor — 30% deduction
- Gross payment status — 0% deduction (paid in full)
Deductions apply to labour costs only — not materials. Contractors must give subcontractors a payment and deduction statement for each payment, which the subcontractor uses when filing their tax return.
Important: Contractors must verify every subcontractor with HMRC before making the first payment. Failing to do so can result in penalties and the wrong deduction rate being applied.
Gross Payment Status
If you'd prefer to receive payments without deductions, you can apply for gross payment status. To qualify, you'll typically need to meet these conditions:
- A good tax compliance record — all returns filed and taxes paid on time
- Your construction business is run through a UK bank account
- Minimum annual turnover of £30,000 (sole traders) or £30,000 per partner/director
HMRC reviews gross payment status annually. If you fall out of compliance — for example, by filing a return late — they can revoke it.
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Common Questions
What is the Construction Industry Scheme (CIS)?
CIS is a tax deduction scheme that applies to contractors and subcontractors working in the UK construction industry. Contractors deduct money from subcontractor payments and pass it to HMRC. These deductions count as advance payments towards the subcontractor's tax and National Insurance.
Do I need to register for CIS as a subcontractor?
You don't have to register, but if you don't, contractors must deduct 30% from your payments instead of the standard 20%. Registering is free and straightforward, so it almost always makes sense to do so.
Can I get gross payment status under CIS?
Yes, if you meet certain conditions — including a good tax compliance record and a minimum annual turnover (£30,000 for sole traders). With gross payment status, contractors pay you in full without deductions, and you handle your own tax payments.
What work counts as construction for CIS?
CIS covers most construction work on permanent or temporary buildings and structures — including site preparation, demolition, building, alterations, repairs, decorating, and installations. It does not cover architecture, surveying, or the manufacture of building materials off-site.
How do CIS deductions affect my tax return?
CIS deductions are advance payments of tax. When you file your Self Assessment tax return, you declare your gross income and offset the CIS deductions already made. If you've overpaid, you can claim a refund from HMRC.
Need Help with CIS?
Whether you're a contractor setting up CIS returns or a subcontractor wanting to reclaim deductions, our CIS and construction accountants can take it off your plate.