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CIS for Contractors & Subcontractors


Under the construction industry scheme, contractors must make a deduction from the gross amount less cost of materials paid for by the subcontractor which they then pay to HMRC. The deduction rates for the new scheme are 20 per cent for subcontractors registered with HMRC for payment under deduction and 30 per cent for those not registered.

If a deduction is required, the contractor must:

  1. Calculate the deduction and make the deduction
  2. Record details of the payment, materials and deduction
  3. Make the net payment to the subcontractor
  4. Complete and give the appropriate statement of deduction to the subcontractor

 The return must show:

  1. Details of all subcontractors. Details of the payments made, and any deductions withheld
  2. A declaration that the employment status of all subcontractors has been considered. This means that the Scheme applies to workers who are self-employed under the terms of the contract, and who are not employees subject to Pay As You Earn (PAYE). This is called a Status declaration.
  3. A declaration that all subcontractors that need to be verified have been verified.
  4. Nil returns must be made when there are no payments in any month.
  5. Each month contractors must send payment for deductions they have made from subcontractors to HMRC Accounts Office (quarterly payments can be made where small deduction amounts are due).

What Our Construction Industry Scheme Service Can Do For You:

  1. Register contractors with HM Revenue & Customs (HMRC) for the CIS scheme
  2. Verify your subcontractors with HMRC
  3. Produce monthly statements of payments & deductions
  4. Monthly Return and submit your monthly returns to HMRC



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