1. Overview

You must register as a contractor with the Construction Industry Scheme (CIS) if:

  • you pay subcontractors to do construction work
  • your business doesn’t do construction work but you usually spend more than £1 million a year on construction

You may be a sole trader, in a partnership or own a limited company.

If you’re not sure if you need to register, check who is covered by CIS.

Rules you must follow

  1. You must register for CIS before you take on your first subcontractor.

  2. You must check if you should employ the person instead of subcontracting the work. You may get a penalty if they should be an employee instead.

  3. Check with HM Revenue and Customs (HMRC) that your subcontractors are registered with CIS.

  4. When you pay subcontractors, you’ll usually need to make deductions from their payments and pay the money to HMRC. Deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.

  5. You’ll need to file monthly returns and keep full CIS records - you may get a penalty if you don’t.

  6. You must let HMRC know about any changes to your business.