CIS registration for subcontractors: how to do it

Short answer: if you are self-employed and do construction work for a contractor, you should register for the Construction Industry Scheme (CIS). Registering online is the quickest route, and it cuts the amount taken from your pay from 30% to 20%. This is general information, not tax advice, so check with your accountant.

What CIS is

Under CIS, a contractor takes money off your payments and passes it to HMRC. That money counts as an advance payment towards your tax and National Insurance. It is not an extra tax.

Who needs to register

• Subcontractor: you do construction work for a contractor. This covers sole traders, limited company owners and partners. You should register.
• Contractor: you pay subcontractors for construction work. Contractors must register.
• Both: if you are both, you must register as both.
• Employees: you do not need to register.

All rates and rules below are as shown on GOV.UK on 11 November 2026.

What you need before you start

• Your legal business name, and your trading name if it is different.
• Your Unique Taxpayer Reference (UTR).
• Your VAT registration number, if you have one.
• The date you started trading.

You may also need your National Insurance number, a Company Registration Number (limited companies) or partner details (partnerships).

No UTR yet? Register as a new business for Self Assessment and pick "working as a subcontractor" when asked. You are then registered for Self Assessment and CIS together.

How to register, step by step

1. Get your details together from the list above.
2. Go to the gov.uk subcontractor registration page.
3. Choose the online route. It is the quickest, and it registers you for net payment status (the 20% rate).
4. Sign in with your Government Gateway details, or create them.
5. Fill in the form. Give true information. GOV.UK says you could be fined for giving false information.
6. Can't use the online route? There is a postal form for sole traders, partnerships and limited companies, on the same page.

What to give your contractor

Give them your UTR and your legal business or trading name, exactly as you registered. They check you with HMRC. HMRC tells them whether you are registered and which rate to use. If they cannot verify you, it can affect how much you are paid.

The deduction rates

The deduction is not taken off the whole invoice. Your contractor starts with the invoice total and takes away what you paid for, then applies the rate to what is left:

• VAT
• materials, but only if you paid for them directly
• plant hire for the job
• consumable stores
• manufacturing or prefabricating materials
• fuel used, except for travelling

The contractor may ask for receipts. With no evidence, they estimate the cost of the materials.

Worked example: a floor fitter

A floor fitter is not VAT registered. They fit a kitchen floor for a contractor and invoice £2,400: £1,500 labour and £900 of flooring they bought themselves.

The deduction applies to £1,500 only (£2,400 minus £900 materials).

Registering puts £150 more in the fitter's hand on this one job. Without receipts for materials, the contractor estimates them, and the deduction could be higher.

Gross payment status

Gross payment status means no deductions. You pay your own tax. HMRC checks three things:

• Compliance: you have paid your tax and National Insurance on time in the past.
• Business: you do construction work, or provide labour for it, in the UK, and run the business through a bank account.
• Turnover: over the last 12 months, ignoring VAT and materials, a sole trader needs at least £30,000. A partnership needs £30,000 for each partner or £100,000 for the whole partnership. A limited company needs £30,000 for each director or £100,000 for the whole company. If five people or fewer control the company, it is £30,000 for each of them.

You can apply online or by post at the gross payment status page. HMRC reviews it every year, and you must keep filing and paying on time to keep it.

Getting the deductions back

Your contractor must give you a monthly payment and deduction statement within 14 days of the end of each tax month. Keep them. HMRC may ask to see them.

• Sole trader or partner: file your Self Assessment return. Enter your total pay before deductions as income, and the deductions as CIS deductions. HMRC works out your bill and takes the deductions off. Pay any balance by 31 January after the tax year ends. If you have overpaid, HMRC pays the refund.
• Limited company: the deductions are set against your PAYE bill through your Employer Payment Summary. Do not use your Corporation Tax return for this.

Need to price work with CIS in mind? Try the day rate calculator and the quote template.