What Is The The Construction Industry Scheme

The Construction Industry Scheme (or CIS) is a system that is specific too construction, in the UK.

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When a contractor or someone who is deemed to be a contractor, makes payment to an individual subcontractor for services that are included within the provision of ‘construction operations,’ a deduction is taken and given to HMRC (unless gross status applies).

These deductions will be classified as an advance payment of any tax or national insurance liabilities the subcontractor will be liable to pay. The contractor will need to register for the CIS, and while the individual is not legally obliged to register; their deductions are taken at a higher level if they remain unregistered under this scheme.
What Types of Work Are Covered by CIS?

Under the CIS, most types of construction work can be covered if the work is for;

  • Civil engineering work – such as bridges and roads
  • Either a temporary or permanent structure or building

A couple of examples of the different disciplines and trades which are classified as construction operations for CIS purposes are listed below. The CIIS scheme covers all types of construction work that is undertaken in the UK and UK territorial waters within the limit of 12-miles offshore.

  • Refurbishments and Repairs
  • Site Preparations – Access Works, Laying Foundations, etc. 
  • Generic Construction – Plastering, Roofing, Bricklaying, etc.
  • Extensions and Alterations 
  • Demolition and Dismantling 
  • Installations Systems – Lighting, Power, Ventilation, Water, Heating, etc. 
  • Plant Operations
  • Painting and Decorating 
  • Internal Cleaning and Clearing of a Building Following Construction Works

If any of the construction work mentioned above is being undertaken outside of the UK, then this is not applicable under CIS. However, if a non-UK-based business is carrying out any works in the UK, they are eligible and should register for CIS. 

What Types of Work Do Not Need to Be Included Under CIS?

If you only perform certain jobs which we will outline below; there is no need to register. These include:

  • Material Delivery Services
  • Scaffolding Hire
  • Fitting Carpets 
  • Working on a Site for non-construction related duties, such as working in the canteen
  • Making Materials – for use within the construction industry, such as machinery or plant equipment 
  • Surveying or Architecture 

HMRC detail the types of work and the CIS scheme in a comprehensive booklet called the CIS340.

If you need any help, advice, or guidance about CIS in the UK, please get in touch with a member of the team at Jatts today. 

How can Jatts assist your business?

  • CIS HMRC Compliance Services

    As a construction-focussed business, Jatts Contracting understands the intricacies you are faced with daily. We are dedicated to supporting each of our clients, helping you take care of important CIS and HRMC Compliance matters. From contractual obligation with subcontractors and clients to routine accounting duties for subcontractor payment taxes; we handle it all. 

  • The Construction Industry Scheme

    Also known as CIS, the Construction Industry Scheme is a system that is specific to the UK. When a contractor or someone who is deemed to be a contractor, makes payment to an individual subcontractor for services that are included within the provision of ‘construction operations,’ a deduction is taken and given to HMRC. 

  • PAYE Umbrella Services

    An Umbrella company employs contractors to undertake short-term projects for clients and recruitment agencies alike. This company will make the necessary PAYE and NI deductions on your behalf to ensure you pay the correct amount of tax. 

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