Single Payment
Deduction Statement

CIS Single Payment Deduction Statement Screenshot

Price: €3

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Multi Payment
Deduction Statement

CIS payment and deduction statement screenshot

Price: €3

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Yearly Set Off
Statement

CIS Yearly Set Off Statement Template Screenshot

Price: €3

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Contractor CIS
Record Book

Contractor CIS Record Book Screenshot

Price: €6

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CIS Articles:

  1. CIS – BASICS
  2. CIS – Contractor’s Duties
  3. CIS – Contractor – How to file CIS return online
  4. CIS – Subcontractor’s Duties
  5. CIS – Templates

Updated on 4 April 2020 by Accountant

Used abbreviations
CIS Construction Industry Scheme
UK and NI United Kingdom and Northern Ireland
HMRC HM Revenue & Customs – Tax office in the UK and NI

What is CIS?

Construction Industry Scheme (CIS) is a tax deduction system, which applies in the construction industry.

The CIS scheme has similar logic as PAYE system where Employer deduct tax from Employee’s gross salary and pay him only net pay. In CIS system we have “Contractor” (who represents Employer in PAYE system) who deduct tax from payments to “Subcontractor” (who represents Employee in PAYE system).

The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

Employer is responsible to deduct tax from payments to employees and similarly contractor is responsible for correct tax deduction from payments to subcontractors.

Who is Contractor?

A Contractor is a self-employed person or a company who pays subcontractor for construction work.

Private householders are not counted as contractors, so they are exempt from CIS scheme.

Who is Subcontractor?

Subcontractor is a self-employed person or a company who carries out construction work for a contractor (client).

Contractor and Subcontractor at the same time

Many businesses can be contractors and subcontractors at the same time. Many businesses pay other businesses for construction work, but are themselves paid by other businesses too. When they are working as a contractor, they must follow the rules for contractors and when they are working as a subcontractor, they must follow the rules for subcontractors.

What is construction work?

CIS scheme covers all construction work carried out to a permanent or temporary building/structure in the UK and NI, including works as follows:

  • a civil engineering work like roads and bridges,
  • site preparation, laying foundations and providing access works,
  • demolition, dismantling
  • construction, building works,
  • installing systems for heating, lighting, power, water and ventilation,
  • alterations, repairs,
  • decorating,
  • cleaning the inside of buildings after construction work.

What is not a construction work?

Some activities as below on construction sites are not construction work:

  • the running of a canteen,
  • the running of a hostel,
  • provision of medical or safety services,
  • provision of security services,
  • provision of site facilities,
  • architecture and surveying,
  • scaffolding hire (with no labour),
  • carpet fitting,
  • making materials used in construction including plant and machinery,
  • delivering materials.

Source:

HM Revenue & Customs, CIS
HMRC CIS Guide, last updated in 2018