To register for the Construction Industry Scheme ( CIS ) you’ll need: your legal business name - you can also give a trading name if it’s different to your business name the Unique Taxpayer Reference ( UTR ) for your business your VAT registration number (if you’re VAT registered) the date you started trading Depending on your circumstances, you may also need to provide your: National Insurance number Company Registration Number Registering partner’s details – including UTR and National Insurance number Joint Venture Agreement If you’re a subcontractor and a CIS contractor (you pay subcontractors to do construction work), you’ll need to register for CIS as both. You could be fined if you provide false information and so could anyone who helps you to make a false registration. Register online The quickest way to register is online. This will register you for ‘net payment status’ (also known as ‘payment under deduction’). To use the online service, you need a: UTR Government Gateway user ID and password If you do not have a UTR , register as a new business for Self Assessment and choose ‘working as a subcontractor’ when prompted. You’ll be registered for Self Assessment and CIS at the same time. If you do not have a Government Gateway user ID, you can create one when you use the service. If you’re an agent, use the Government Gateway user ID you use to sign in to your agent services account. Start now If you’ve registered as a new business for Self Assessment, you can check when to expect a reply from HMRC . Register by post If you cannot register online, you can send a postal form. Fill in the form below that applies to you: register if you’re a sole trader register if you’re in a partnership register if you’re a limited company If you’re based abroad You should still register for CIS if you are a subcontractor based abroad but do construction work in the UK. Sign up for webinars and emails You can sign up for webinars and emails about CIS .

To be paid correctly by a contractor, make sure you give them the exact same legal business name or trading name you gave when you registered for the Construction Industry Scheme ( CIS ). You should also give them your Unique Taxpayer Reference ( UTR ) so they can verify you. If you do not, this could affect how much you get paid. Deduction rates When a contractor pays you under CIS , they’ll normally make deductions at the standard rate of 20%. Contractors will make deductions at a higher rate of 30% if: you are not registered for CIS they cannot verify you you give the wrong name for your business Your contractor should give you monthly statements of payments and deductions. Use them to calculate whether you still owe tax and National Insurance to HM Revenue and Customs ( HMRC ) or are due a refund. Gross payment status You can apply for gross payment status when you register for CIS . This means the contractor will not make deductions from your payments and you’ll pay all your tax and National Insurance at the end of the tax year. What does not count as your pay Contractors will not make a CIS deduction 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 you for evidence (for example, receipts) that you directly paid for materials. If you do not have any evidence, the contractor will estimate the cost of the materials.

Pay tax and claim back deductions

When you’re registered with the Construction Industry Scheme ( CIS ), you’re still responsible for paying the correct tax and National Insurance for your business, even if deductions have been made by contractors throughout the year. Contractors will give you a monthly statement of what they’ve paid you and deductions they’ve made to help with your accounting. Sole traders and partners At the end of the tax year, send in your Self Assessment tax return as usual. You should record: the full amounts on your invoices as income any deductions contractors have made in the ‘ CIS deductions’ field HM Revenue and Customs ( HMRC ) will work out your tax and National Insurance bill and take off any deductions made by contractors. If you still owe tax after this, you’ll need to pay it by 31 January following the end of the tax year. If you’re due a tax refund, HMRC will pay the money back. Limited companies If you have gross payment status , declare all your income in your Corporation Tax return as usual. If you pay CIS deductions, you must claim these back through your company’s monthly payroll scheme. Do not try to claim back through your Corporation Tax return - you may get a penalty if you do. Send your monthly Full Payment Submission (FPS) as usual to HMRC. Also send an Employer Payment Summary (EPS) . Enter the total CIS deductions for the year to date. HMRC will take your CIS deductions off what you owe in PAYE tax and National Insurance. Pay the balance by the usual date. If your company’s PAYE bill for the period is reduced to zero and you still have some CIS deductions you have not been able to claim back, carry these forward to the next month or quarter (in the same tax year). Tell HMRC in the EPS that you have nothing to pay. If HMRC thinks your claim is wrong HMRC may ask you to provide evidence for your CIS deductions or to change your claim. If you do not do this by the deadline they give you, HMRC will correct your claim and you will not be able to make any more claims in that tax year. You can appeal HMRC ’s decision. They’ll tell you how to do this. Keep records Your company must keep a record of amounts claimed back against your monthly or quarterly PAYE bill. You can use form CIS132 to do this or keep your own records. If you paid too much in CIS deductions HMRC will pay back any deductions your company has not been able to claim back from its PAYE bill during the tax year. If your company goes into administration If your company goes into administration or you liquidate your company , the person managing it should write to HMRC to ask for CIS deductions to be repaid straight away. PT Operations HM Revenue and Customs BX9 1BX If you do not have all your CIS statements If you have not received all the CIS statements you need from your contractor, you can ask them to send you replacement copies. If the contractor you’re working for stops trading and you have not been able to get all your CIS statements you should write to HMRC . Include 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 the statements or duplicates PT Operations HM Revenue and Customs BX9 1BX

How to get gross payment status

Having gross payment status means contractors will pay you in full, without deductions. You’ll pay all your tax and National Insurance at the end of the tax year. To qualify You must show HM Revenue and Customs ( HMRC ) that your business passes some tests. You’ll need to show that: you’ve paid your tax and National Insurance on time in the past your business does construction work (or provides labour for it) in the UK your business is run through a bank account HMRC will look at your turnover for the last 12 months. Ignoring VAT and the cost of materials, your turnover must be at least: £30,000 if you’re a sole trader £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership £30,000 for each director of a company, or at least £100,000 for the whole company If your company’s controlled by 5 people or fewer, you must have an annual turnover of £30,000 for each of them. You could be fined if you provide false information and so could anyone who helps you to make a false registration. Apply online or by post You can apply for gross payment status by filling in an online or postal form. This will also register you for the Construction Industry Scheme ( CIS ) if you’ve not already registered. The form you fill in depends on whether you’re a: sole trader partnership limited company Paying tax when you have gross payment status You must declare your payments as income at the end of the tax year in: your Self Assessment tax return if you’re a sole trader or partner your Corporation Tax return if you own a limited company

If you have gross payment status , HM Revenue and Customs ( HMRC ) will review your business every year, to decide if you can keep your status. You must be on time with your tax returns and payments to keep your gross payment status. If you run a limited company, HMRC will review the company itself, rather than individual directors or shareholders. You do not meet all the conditions You could fail the review and HMRC will remove your gross payment status. You’ll be allowed a small amount of late payments or returns. Contact HMRC if you have problems paying your tax on time. If HMRC give you more time to pay, this will not affect your gross payment status. You fail your review You’ll get a letter explaining you’re about to fail the review, along with the reasons why. If you disagree, you can write back with your reasons. If HMRC accept your explanation, they will not remove your gross payment status. If you do not reply to the letter or HMRC does not accept your explanation, they’ll write to explain: what conditions you have not met that they’re withdrawing your gross payment status in 90 days If you think HMRC have made the wrong decision, you have 30 days from the date of this letter to appeal. Reapplying for gross payment status If HMRC cancel your gross payment status, you need to wait a year from the date of the cancellation before you can reapply.

Changes you need to report

Report changes by calling the Construction Industry Scheme ( CIS ) helpline . Tell them if you: change from a sole trader to a partnership leave a partnership or company to become a sole trader create a company or change your business to a company You’ll usually need to register again for CIS - as you cannot transfer the registration from your old business structure. If you have gross payment status , you’ll need to apply again. You must also tell HM Revenue and Customs ( HMRC ) if you: change your trading name change your business, private or registered office address stop trading add new shareholders - HMRC may withdraw your gross payment status if you do not tell them within 30 days Stop trading If your business goes into administration it can keep receiving payments for work it’s done under CIS . It should be paid in the same way that it was paid normally - either gross or under deduction.

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

Q: Overview

You should register for the Construction Industry Scheme ( CIS ) if you work for a contractor and you’re one of the following: a sole trader the owner of a limited company a partner in a partnership or trust Under CIS , a contractor must deduct 20% from your payments and pass it to HM Revenue and Customs ( HMRC ). This is called ‘net payment status’ (also known as ‘payment under deduction’). These deductions count as advance payments towards your tax and National Insurance bill. If you do not register for the scheme, contractors must deduct 30% from your payments instead. If you do not want deductions made If you do not want deductions to be made in advance by contractors, you can apply for ‘gross payment status’ . This will also register you for the Construction Industry Scheme ( CIS ) if you’ve not already registered. You do not need to register for CIS if you’re an employee. Check your employment status if you’re not sure.

Overview

You should register for the Construction Industry Scheme (CIS) if you work for a contractor and you’re one of the following:

a sole trader
the owner of a limited company
a partner in a partnership or trust

Under CIS, a contractor must deduct 20% from your payments and pass it to HM Revenue and Customs (HMRC). This is called ‘net payment status’ (also known as ‘payment under deduction’).

These deductions count as advance payments towards your tax and National Insurance bill.

If you do not register for the scheme, contractors must deduct 30% from your payments instead.

If you do not want deductions made

If you do not want deductions to be made in advance by contractors, you can apply for ‘gross payment status’. This will also register you for the Construction Industry Scheme (CIS) if you’ve not already registered.

You do not need to register for CIS if you’re an employee. Check your employment status if you’re not sure.

View a printable version of the whole guide

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

Overview

If you do not want deductions made

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

Overview

If you do not want deductions made

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