The Construction Industry Scheme (CIS) is HMRC's system for collecting tax on self-employed construction work at source. A contractor who pays you deducts a percentage from the labour part of your invoice and passes it to HMRC as an advance on your Income Tax and National Insurance. If you searched "what is CIS construction" after a main contractor asked for your CIS status, or after 30 percent vanished from a payment, this page explains the scheme end to end: the three deduction rates, registration and verification, who actually asks for it, and the trades that can ignore it. Everything below follows HMRC's published rules and is general information, not tax advice.
The Construction Industry Scheme in plain English
CIS has two roles, and you can hold both at the same time.
- Contractor: any business that pays subcontractors for construction operations. HMRC also treats organisations outside construction as "deemed contractors" once their construction spend passes an HMRC threshold, which is why housing associations, councils, universities and large landlords operate CIS without ever laying a brick.
- Subcontractor: anyone a contractor pays for construction operations. Sole traders, partnerships and limited companies are all inside the scheme.
Employees are not in CIS: if a firm sets your hours, supplies your tools and pays a wage, that is PAYE whatever the contract says. A builder who pays a plasterer and also works for a main contractor is both, and must register as both. HMRC publishes the contractor's duties and the subcontractor's duties separately.
How CIS deductions work: 30, 20 and 0 percent
Your registration status with HMRC decides which of three rates applies.
| Your status with HMRC | Deduction from labour | Who ends up here |
|---|---|---|
| Not registered, or the contractor cannot verify you | 30 percent | New subbies, or anyone whose details do not match HMRC's records |
| Registered, net payment status | 20 percent | The default for most sole traders and small companies |
| Registered, gross payment status | 0 percent | Businesses passing HMRC's turnover, business and compliance tests |
The deduction comes off the labour element only. Before applying the rate, the contractor takes off VAT and the cost of materials you bought directly for the job, and HMRC's guidance also lets them exclude items such as plant hire. So itemise materials on every invoice: if you do not show the cost, the contractor has nothing to exclude and the deduction lands on the whole amount.
Deductions are advance payments, not lost money:
- Sole traders and partners get them credited against their Self Assessment bill, with any excess refunded.
- Limited companies set them against the PAYE, National Insurance and CIS amounts they owe each month and claim any balance after the tax year.
For every tax month with a deduction, the contractor must give you a payment and deduction statement. Keep every one; they are the evidence behind your refund or offset.
What is CIS construction work? The operations HMRC covers
CIS applies to "construction operations" carried out in the UK, and HMRC defines the term widely in its CIS340 guide. Inside the scheme:
- Site preparation, demolition and dismantling
- Building, altering, repairing or extending buildings and structures, permanent or temporary
- Installing heating, lighting, power, water and ventilation systems
- Painting and decorating, plus internal cleaning after construction work
- Civil engineering such as roads, drainage and bridges
Outside the scheme, per HMRC: architecture and surveying, scaffolding hire with no labour, carpet fitting, delivering materials, manufacturing components off site, and running site facilities such as a canteen. For maintenance trades the key word is "repair": re-roofing, rewiring and replacing a boiler are CIS construction operations, fitting a carpet is not.
Who actually asks for your CIS status
This is the part no accountant's blog can tell you. We audited the registration requirements of 557 UK work sources, from housing association portals to tier-1 supply-chain registers and agency routes. As of July 2026, at least 77 of the 557 UK work sources we tracked capture your CIS registration or payment status at sign-up. That is a floor: 63 of the 77 inherit a shared supplier-portal field set, and many others ask at PQQ stage instead.
Where the demand sits:
- Housing associations and procurement groups: 19
- CIS-based agency and labour-supply routes: 11
- Shared services and council portals: 11
- Landlords with 10,000 or more homes: 9
- Universities: 7
- Frameworks, NHS trusts and London borough portals: 13 between them
Two things stand out. First, many forms still ask for a "CIS certificate and card number", a leftover from the card-based scheme HMRC replaced in 2007. There is no card: enter your UTR and state whether you hold net or gross status. Second, some ask outright for your payment status, because net status means 20 percent to withhold and report on every valuation. Housing providers that hire through platforms like PlanaJob, where property managers compare quotes from vetted contractors, tend to settle this at onboarding rather than on the first invoice.
Do you need CIS? A decision table by trade and company type
Nobody needs everything. Here is where the line falls.
| Your situation | Register? | Why |
|---|---|---|
| Sole trader doing labour-only or supply-and-fit for builders, main contractors, housing providers or CIS agencies | Yes, as a subcontractor | Unregistered means 30 percent off every labour invoice |
| Limited company subcontracting to any contractor | Yes, as a subcontractor | Deductions are offset against your monthly PAYE and CIS bill |
| Any firm that pays subcontractors for construction operations | Yes, as a contractor, and it is a legal duty | Register as both if you also work for contractors |
| Trades working only for private homeowners | No | Householders are never CIS contractors |
| Trades working only for small letting agents or landlords | Usually no | Only deemed contractors above HMRC's spend threshold operate CIS; ask first |
| Carpet fitters, scaffold hire without labour, materials delivery, architects and surveyors | No | Outside HMRC's definition of construction operations |
The same table applies from the other side. A small lettings agency paying trades for landlords is not normally a contractor; a large housing provider almost certainly is. The property managers page explains how jobs are raised and quoted; whether you must operate CIS on top is one for your accountant.
Registering, getting verified and what it costs
Step by step
- Get a UTR. Sole traders register for Self Assessment; companies use their Corporation Tax UTR. You cannot register for CIS without one.
- Register for CIS online with HMRC as a subcontractor, a contractor, or both. Sole traders can register for Self Assessment and CIS together via the HMRC CIS page.
- Choose net or gross. Net status comes with registration; gross is a separate application. As checked on GOV.UK in September 2026, HMRC looks for net construction turnover of at least £30,000 for a sole trader, or £30,000 per partner or director with a whole-business alternative of £100,000, plus a record of paying tax on time and a business run through a bank account. Check the live figures before applying.
- Get verified. Before the first payment, the contractor verifies you with HMRC using your UTR plus your National Insurance number or company registration number, and HMRC tells them which rate to apply. If your trading name does not match HMRC's records, expect 30 percent until it is fixed.
Cost and timing
As of September 2026, HMRC charges nothing to register for CIS, nothing for verification and nothing to apply for gross status, with no renewal fee. The only costs are your time and, if you use one, your accountant. Be wary of third-party sites that charge to "register you for CIS": they fill in the same free form. HMRC confirms by post, so start well before your first invoice.
What registered status unlocks
Registering moves you from 30 to 20 percent immediately, a ten-point difference on every labour invoice. It also clears the CIS field on those 77-plus registration forms, so your first payment is not held while someone chases your UTR. Gross status goes further: the whole invoice lands and cash flow stops depending on a year-end refund. For the routes that actually pay gross, read where to find CIS subcontractor work and get paid gross.
Subbies comparing notes on which contractors issue statements on time do it in the Contractor Club community, not on any official page.
You will probably want a PlanaJob contractor account if you are a registered subbie doing repairs and maintenance for landlords, agents and housing providers, and would rather quote on jobs than chase them. Have your UTR and payment status ready when you sign up, because a property manager who operates the scheme must verify you before the first job. Our other contractor business guides cover the paperwork that follows.
Questions subcontractors ask about CIS
Is CIS the same as being self-employed?
No. Self-employment is your tax status; CIS is a deduction scheme layered on top of it for construction work only. A self-employed decorator working for a main contractor is inside CIS. The same decorator working only for homeowners is not, but still files Self Assessment.
Can I refuse to be paid under CIS?
No. If the payer is a contractor under the scheme and the work is a construction operation, HMRC requires them to operate it. The only ways to change the deduction are to register, which takes you to 20 percent, or to qualify for gross status, which takes you to zero.
Does CIS apply to work for a letting agent or property manager?
Only if that agent is a contractor under the scheme. Most small agencies are not, because their construction spend sits below HMRC's deemed contractor threshold; large landlords and housing associations usually are. Ask before the first invoice, and itemise materials either way.