Subcontractor or Contractor

If you are not sure - take this

Simple Questionaire

Subcontractor (CIS)

If you do construction work for a contractor, you may be paid under the Construction Industry Scheme (CIS).

The contractor can deduct CIS from your payments (typically 20% or 30%) and you’ll usually receive a CIS statement.

Any CIS deducted is credited against your tax through Self-Assessment and many subcontractors are due a refund.

Quick check

• Are CIS deductions being taken from your pay, and do you receive CIS statements each time?
• Have you checked the deductions are correct and kept a note of what was deducted recently?
• Are your expenses properly recorded (Tools, Fuel, Mileage, Workwear, Insurance)?
• Do you have other income alongside CIS (PAYE, Benefits, Rental) or work for more than one contractor?
• Are you up to date with Self-Assessment, and have HMRC contacted you about late or missing filings?

When to get help

• You think you’ve overpaid CIS and want a refund review
• You’re behind on deadlines or have unfiled tax years
• You’ve received HMRC letters you’re unsure about

Contractor (CIS)

If you hire and pay subcontractors for construction work, you may need to operate CIS as a contractor.

In many cases, contractor registration is mandatory, including where businesses have spent £3m+ on construction in the last 12 months.

Some organisations that act as “clients” (such as developers and public bodies) can also be treated as contractors.

What you need to do

• Register for CIS with HMRC
• Verify subcontractors and apply the correct status (20% / 30% / gross)
• Keep accurate payment records
• Submit monthly CIS returns on time

Quick check

• Are you registered for CIS and verifying subcontractors before paying them?
• Do you know each subcontractor’s CIS status, including gross payment status?
• Are you submitting monthly returns on time and avoiding penalties?
• Do you need help setting up or checking CIS in Xero?