If you work in the construction industry, whether as a contractor, subcontractor or on a construction site as part of your day-to-day duties, the work you carry out may fall under the Construction Industry Scheme (CIS).
CIS was created by HM Revenue & Customs (HMRC) in order to facilitate the collection of tax from construction industry workers. If you choose to operate as a CIS registered worker, it allows you to take advantages of a range of benefits.
Under the CIS scheme, contractors deduct money from subcontractor, which is then passed to HM Revenue and Customs. The deductions count as advance payment towards the subcontractor tax.
Contractors: As a contractor, you are required to meet specific obligations under the scheme, including registering with HMRC, checking whether your subcontractors are registered with HMRC, paying subcontractors, deducting tax and submitting monthly statements confirming these payments.
Sub-contractors: If you are a sub-contractor, your main obligation is to register with HMRC. You must also keep HMRC informed of any changes to your business such as changes to your business address, business name, business partners and other relevant information.