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What you must do as a Construction Industry Scheme (CIS) subcontractor

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Get paid

When you start working for a contractor, give them the exact details you gave when you registered for the Construction Industry Scheme (CIS). Include your:

Your contractor uses these details to verify you. If they cannot verify you, it can affect how much you’re paid.

Deduction rates

When a contractor pays you under CIS, they’ll take deductions at the standard rate of 20% if both of these apply:

If either do not apply, contractors will take deductions at a higher rate of 30%.

If you have gross payment status, the contractor will not take deductions from your payments. You’re responsible for paying your own tax.

What does not count as your pay

Contractors will not take CIS deductions from amounts you charge on your invoice for:

  • VAT
  • equipment which is now unusable (‘consumable stores’)
  • plant hired for the job
  • manufacturing or prefabricating materials
  • materials that you have paid for directly

Your contractor may ask for evidence of payments you have made for materials (for example, receipts). If you do not have any evidence, the contractor will estimate the cost of the materials.

Get statements

Each month, your contractor must give you a payment and deduction statement showing:

  • what they’ve paid you
  • deductions they’ve taken

They must give it to you within 14 days of the end of each tax month. If they do not, ask them for it. If you think the figures are incorrect, speak to your contractor.

Keep a record of your statements, as HMRC might ask for evidence of your deductions when you pay tax and claim back deductions. If you lose any statements, ask your contractor for a replacement.

If you cannot get statements from your contractor

If you’re unable to get all of your statements (for example because your contractor has gone out of business), write to HMRC and give them the following information:

  • your name, address and Unique Taxpayer Reference (UTR)
  • the name and address of the contractor
  • the contractor’s tax reference - if you know it
  • the dates of the payments or the tax months when the contractor paid you
  • the reason why you do not have statements or duplicates

PT Operations
HM Revenue and Customs
BX9 1BX

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