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What is the Construction Industry Scheme?

The Construction Industry Scheme (CIS) is set in place for contractors to deduct money from the subcontractor’s payment for it to then be delegated to HM Revenue and Customs (HMRC).

The deductions act as an advanced payment method, to contribute towards the National Insurance and Tax. While contractors must register for the scheme, it is optional for the subcontractors however, deductions will be increased in size if they decide against registration.

To register as a contractor, it is necessary that you are paying subcontractors for construction work. Also, it is also important that your business does not operate in construction however, you must spend an average of £1 million on construction every year, across any 3-year period.

To qualify as a subcontractor, you must take part in construction work for a contractor. If you fall under both categories, it is essential that you apply to both.

Structural Defects Insurance

The types of construction work that are covered by the CIS are permanent or temporary building structures and civil engineering work for example, bridges and roads.

For the purpose of CIS, construction work usually includes demolishing the site, building work, alterations and repairs, site preparations, installing systems for heating or lighting and cleaning the interior of the building.

While registering is recommended, it is not necessary if you have a certain role within the industry, such as architecture and surveying, creating material that is used in construction, working on-site as a non-labourer.

If you would like to know more about which jobs are covered by CIS, visit the CIS guide for contractors and subcontractors for further details.

Specialists in Construction Insurance


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