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HMRC internal manual

PAYE Manual

HM Revenue & Customs
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Employer records: maintain employer record: construction industry scheme (CIS) - 2008 onwards

CIS was replaced by ‘New CIS’ on 6 April 2007 to

  • Reduce the administrative costs and burden to industry
  • Improve levels of compliance
  • Increase the number of construction workers with correct employment status

The new scheme

  • Replaces the registration cards (CIS4) and gross payment certificates (CIS6 and CIS5) with a verification service
  • Introduces a new employment status declaration
  • Replaces the vouchers in the current scheme with periodic returns
  • Replaces the current computer system with a new one capable of supporting the use of ‘e’ services, such as communication over the Internet, and which will better support our compliance activities

‘New CIS’

‘New CIS’ will remove some of the administrative burden and provide alternatives to the paper based processes of CIS. In addition ‘New CIS’ aims to improve the level of tax obligation compliance by construction businesses, including getting the employment status of their workers right.


Contractors are required to verify subcontractors with HM Revenue & Customs to

  • Check the subcontractor is registered for CIS


  • Find out whether the subcontractor should be paid gross or under deduction

Verification will not be necessary if a contractor is paying a subcontractor in 2007-08 or later and

  • They have already included them on any monthly return in that tax year


  • They have included them on a return in either of the previous two tax years

Note: If the previous two tax years were either 2005-06 or 2006-07, the contractor must also have seen a valid certificate or card with an expiry date of April 2007 or later. Otherwise, verification will be necessary.

Monthly returns

Under ‘New CIS’, vouchers are replaced by monthly returns.

Contractors must send in a return every tax month showing the payments made to all subcontractors. They can choose to send the return either in paper format or electronically.

Contractors must also make nil returns, if they make no payments in the month. These can be made by phone.

No more annual returns for 2008 onwards

Contractors will no longer have to submit CIS36 annual returns of payments to subcontractors during the year. Contractor annual returns CIS36 are appropriate for years up to and including 2006-07.

Status declarations are required

The monthly return will include a mandatory declaration by the contractors that none of the persons included in the return were engaged under a contract of employment.


There will be no need for the vast majority of subcontractors to register with us. If they were registered under the old system, they will be transferred to the new system without the need for further action. Except those subcontractors who had temporary registration cards (CIS4(T)) that expired before April 2007 and were never renewed or replaced by permanent cards or certificates.

Subcontractors who are new to the industry after 5 April 2007 will need to register for ‘New CIS’. To register for ‘New CIS’, subcontractors will need to apply to HM Revenue & Customs, preferably by telephone or by using the Internet, although some will have to call at a local office to provide documentation in person.

Gross payments

Subcontractors with certificates showing an expiry date of April 2007, or later, were automatically be registered for gross payment when ‘New CIS’ started. They will simply carry on receiving gross payment under the new scheme as before. It was therefore important for sub-contractors to ensure that they met all of the statutory tests for the old scheme when making new, or renewing, applications for gross payment before 6 April 2007.

Net payments

Subcontractors with permanent registration cards, or temporary cards expiring in April 2007 or later, will be paid under deduction.