Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) is a tax regime governed by HMRC that applies to contractors and subcontractors in the UK construction sector. It affects how payments are made for construction work, and requires careful handling of deductions, submissions, and recordkeeping. Missteps can result in delayed payments, penalties, or disrupted business cash flow.
At My Tax Consultants, we offer expert support across all areas of the CIS process—from registration to CIS deductions, gross payment status applications, and monthly CIS returns. Our accounting service is tailored to keep you compliant while reducing administrative strain.
Understanding the Construction Industry Scheme (CIS)
CIS was introduced to minimise tax evasion in the construction industry. Under CIS, contractors must deduct a portion of a subcontractor’s pay and forward it to HMRC as advance income tax. Subcontractors, meanwhile, have to keep their tax records in line with those deductions and reconcile them through self-assessment at the end of the year.
The scheme applies to a wide range of work, including site preparation, demolition, building, repairs, alterations, decorating, and related civil engineering projects. Businesses spending over £3 million on construction over a year may also be treated as contractors, even if construction is not their core activity.
Our team helps you determine whether you’re classed as a contractor, subcontractor, or both, and then applies the correct tax processes.
CIS Deductions: What You Must Do as a Contractor
As a contractor, you are responsible for making the right CIS deductions from payments to subcontractors. These deductions go directly to HMRC as tax contributions and must be recorded and submitted properly.
The deduction rate is 20% for registered subcontractors and 30% for those who have not registered with HMRC under the scheme. No deduction is required for subcontractors approved under gross payment status, provided their payments and records are up to standard.
At My Tax Consultants, we manage your entire deduction process, verify subcontractor registration status, calculate the correct amounts, and generate deduction statements. We also reconcile these deductions during your year-end accounts or self-assessment submission, ensuring everything lines up with HMRC records.
Subcontractor Registration and Gross Payment Status
If you are a subcontractor working within the CIS framework, registration is vital to avoid higher tax deductions. Unregistered subcontractors automatically have 30% of their earnings deducted, while registered ones face a 20% rate. With correct documentation and compliance history, you may be eligible for gross payment status, allowing you to receive full payments without deductions.
Applying for subcontractor registration involves providing HMRC with detailed business and personal information. Gross payment status requires proof of timely tax payments, accounting records, and meeting income thresholds.
Our team supports you through the entire application and registration process. We review your eligibility, complete all required paperwork, and assist in maintaining your status year after year by helping you meet ongoing compliance conditions.
Monthly CIS Returns and Contractor Obligations
Contractors must submit CIS returns to HMRC every month. These returns must detail payments made to subcontractors, the deductions taken, and verification of employment status for each individual or company.
The deadline for submission is the 19th of each month following the tax period. Missing deadlines or submitting inaccurate information may lead to automatic fines starting at £100. If left unresolved, these penalties can increase over time and compound across multiple periods.
Our CIS team ensures that your monthly returns are submitted accurately and on time. We monitor deadlines, prepare complete documentation, and keep your records audit-ready. We also liaise directly with HMRC to resolve any discrepancies or issues on your behalf.
Maintaining Compliance with the Construction Industry Scheme
CIS compliance is about more than just submitting monthly forms. You need up-to-date records, clear communication between contractors and subcontractors, and systems in place to ensure consistency. Delays or inaccuracies can disrupt cash flow or trigger penalties.
At My Tax Consultants, we provide full-service support. This includes managing CIS deductions, handling subcontractor registration, submitting CIS returns, and applying for gross payment status. We also reconcile CIS deductions with your company’s payroll and bookkeeping systems and provide year-end summaries for tax submissions.
Why Choose My Tax Consultants for CIS Support?
Understanding and applying the rules of the Construction Industry Scheme can be time-consuming and frustrating for businesses already managing multiple projects and teams. Our CIS services are designed to reduce your administrative burden, ensure full compliance with HMRC, and help you avoid unnecessary fines or lost income due to registration issues or deduction errors.
We provide CIS-specific accounting for sole traders, partnerships, limited companies, and large contracting firms. Whether you’re new to CIS or have experienced filing challenges, we tailor our support to match your situation.
Get expert CIS support today
Make your CIS obligations simple and stress-free. Let My Tax Consultants handle your Construction Industry Scheme requirements with care and accuracy. From CIS deductions to subcontractor registration, gross payment status, and CIS returns, we’re here to keep you compliant and focused on your business.
Contact My Tax Consultants today for a free consultation and dependable CIS support.
