Construction Industry Scheme (‘CIS’)

Dec 7, 2024 | Blog

TRADESMEN – In the UK understanding the ‘CIS’ is important for getting your tax affairs in order. CIS is a way for HMRC to collect tax from construction workers. If you’re self-employed or subcontracting in the construction industry, you might need to register for CIS.

Under ‘CIS’, contractors (those hiring you for work) have to deduct tax from your payments before you get them.

This tax is either 20% (for registered subcontractors) or 30% (if you’re not registered). The money is then sent directly to HMRC. Being registered means you pay less tax than if you’re unregistered, but it also means you’ll need to keep accurate records and submit monthly reports.

As a subcontractor, you’ll also need to file your annual Self-Assessment tax return, where you’ll report your total earnings and claim back any tax you’ve overpaid. Don’t forget to keep track of your business expenses too, as you can offset them against your income to reduce the amount of tax you owe.

So, remember to keep your paperwork in check and register for CIS if you’re working in construction – it’ll save you a headache come tax time.