How To Register For CIS As A Contractor: Step-By-Step Guide

If you’re in construction, you likely know about the Construction Industry Scheme (CIS). It’s how taxes are figured out and paid in the construction business.

A lot of people believe CIS is only for subcontractors. But it’s just as important for contractors. They connect clients or property owners with the subcontractors doing the actual work. The contractor manages the project, pays subcontractors, and makes sure taxes are paid to HMRC correctly.

Some contractors work directly with owners, managing projects without subcontractors. Others bring in subcontractor teams. Either way, you need to register under CIS. If you’re paying or getting construction payments, CIS is involved, and HMRC wants you registered.

This guide will tell you what it means to be a CIS contractor, the difference between company and individual contractors, and how to register.

Understanding the Construction Industry Scheme (CIS)

HMRC uses the Construction Industry Scheme (CIS) to control how contractors and subcontractors in the construction industry handle taxes.

Under CIS, contractors are required to pay HMRC directly after deducting tax from their payments to subcontractors. This deduction is applied to the subcontractor’s National Insurance and Income Tax in advance.

The scheme covers almost every kind of construction work in the UK, including:

• Site preparation, groundwork, and demolition
• Building, bricklaying, and roofing
• Repairs, renovations, and maintenance
• Electrical, plumbing, and decorating work

If you hire people for construction, even if you’re not a construction company, HMRC considers you a contractor under the Construction Industry Scheme (CIS). Before you can pay anyone, you must register.

What Does It Mean To Be a CIS Contractor?

To put it simply, a CIS contractor is the person or business responsible for paying subcontractors to carry out construction work on a project.

Think of it like this:

• The private owner hires the contractor to handle the full project.
• The contractor manages the job, hires workers, oversees deadlines, and pays the subcontractors who perform the work.

In this setup, the contractor acts as the link between the client and the labour force. Even though the client pays the contractor directly, the contractor is still in charge of making sure subcontractors’ taxes are paid correctly.

However, not all contractors hire subcontractors. Some smaller contractors work directly for private owners, managing their own teams or doing all of the work themselves. If they meet HMRC’s criteria, they might still be required to register under CIS since CIS covers anyone who pays others for construction work or spends a lot of money on building projects.

You’re classed as a contractor if:

• You pay subcontractors for construction work.
• Your business spends over £3 million on construction within 12 months, even if construction isn’t your main trade.

You remain at the centre of the CIS process whether you are working directly for private clients or overseeing several subcontractors.

Contractor (Limited Company)

If you run a limited company, and that company either hires subcontractors or spends heavily on construction, HMRC classifies you as a CIS contractor.

This applies to most building firms, developers, and companies that handle project management. It becomes legally required to register for CIS once you fall into this category.

If you run a limited company, here’s how to sign up as a contractor:

Step 1: Make sure your company is registered for Corporation Tax

Before registering for CIS, your business must be properly registered with HMRC. You can do this through GOV.UK.

Step 2: Sign in to your HMRC business tax account

You will require your Government Gateway login information. If you don’t have them yet, you can create an account during the process.

Step 3: Register for CIS as a contractor

After logging in, select “Contractor” under “Register for the Construction Industry Scheme (CIS).” Enter your company’s information, such as your business address, contact information, and Unique Taxpayer Reference (UTR).

Step 4: Wait for HMRC confirmation

After your registration is accepted, HMRC will send you a confirmation notice. You’ll then be able to start verifying subcontractors and processing payments under CIS.

Step 5: Submit monthly CIS returns

From then on, you must file a CIS return every month (even if you haven’t made any payments). These returns list each subcontractor you’ve paid, how much you paid them, and how much tax you deducted.

Ongoing Responsibilities for Company Contractors

Once you’re registered, you’ll need to:

• Verify every subcontractor with HMRC before payment.
• Deduct 20% tax for registered subcontractors, or 30% if they’re not registered.
• Submit monthly CIS returns by the 19th of every month.
• Keep full records of payments, deductions, and verification numbers.

Failing to submit returns or pay on time can result in penalties ranging from £100 for being one day late to thousands for continued delays.