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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): scheme overview: CIS - from 6 April 2007 - registering for the scheme

Contractors and subcontractors register for the Construction Industry Scheme.

A contractor must register for the Construction Industry Scheme when they first engage subcontractors. The contractor will then be given a Contractor Scheme Reference and will be issued with monthly returns (CIS300). Larger contractors who operate from more than one site can have more than one scheme so that returns go to the correct address.

A subcontractor must register for the Scheme if they wish to receive payments without any deductions (gross payment) or following a deduction of a standard amount (20%) on account of tax (payment under deduction). Subcontractors who do not register will receive payments after a deduction of a higher amount (30%) on account of tax (higher rate).

To successfully register for payment under deduction or gross payment a subcontractor must be able to provide HMRC with evidence of their identity. In some circumstances HMRC will call the subcontractor into an HMRC office to carry out an identity check (CISR42150).

To successfully register for gross payment the subcontractor must also satisfy three tests. The

  • business test
  • turnover test
  • compliance test

CISR43010 gives detailed information on how a subcontractor can apply to be registered for gross payment.

CISR43020 will advise you that three tests are required to be passed to provide a successful application.