Understanding what the Construction Industry Scheme (CIS) is - and how to register for it - is important for all contractors and subcontractors working in the construction industry. 

The CIS is a tax deduction scheme specific to the construction industry in the UK. It applies to both contractors and subcontractors working within the construction industry, and was set up by HMRC to collect income tax from builders throughout the year. That’s why registering for the CIS is a legal must for contractors and is recommended for subcontractors too. 

Whether you’re a contractor or a subcontractor, you've come to the right place to learn how to register. In this guide, we'll walk you through how to have a smooth registration process while staying on top of HMRC regulations. Let’s start with the question you need to consider before you start:

Who needs to register for the CIS?

You must register for the CIS as a contractor if:

• You work as a contractor in the construction industry
• You pay subcontractors for construction work
• Your average annual construction expenditure exceeds a certain threshold (currently £3 million)
• Your business is based in the UK

You can register as a subcontractor if you do construction work for a contractor. And you can register as both if you fall under both categories.

It’s worth noting that contractors must sign up for the CIS, while subcontractors don’t legally have to register. However, bear in mind that deductions are taken from subcontractors’ payments at a higher rate if they’re not registered. Registered subcontractors will have tax deducted at the standard rate, which is currently 20%, while unregistered subcontractors will have tax deducted at a considerably higher rate, which is currently 30%.

If you’re a subcontractor based overseas but you carry out construction work in the UK, you should still register for CIS. You can find out more about how to register as a contractor or subcontractor living outside the UK here on the government’s website. 

What type of construction work does the CIS apply to?

The CIS covers most building or structural construction projects and civil engineering works, like roads and bridges. It covers all aspects of the construction process - from demolition and preparing a site to decorating, making alterations and installing systems. 

Just be aware that there are some jobs which are exempt from the CIS, such as carpet fitting, surveying and delivering building materials. 

If you’re not sure whether or not you need to register, we’d advise speaking to a tax advisor, who will be able to confirm this for you - and help you handle the CIS registration process end-to-end. 

What documents will I need to register? 

Once you’ve confirmed that you’re eligible to register, the next step is to gather all the information HMRC will need from you. You’ll need:

• Your unique taxpayer reference number (UTR): This is a 10-digit number provided by HMRC when you register for self-assessment. If you don't have one, make sure to apply for one before you start registering for the CIS.
• Your National Insurance Number (NI): This is a personal identifier used for social security and tax purposes in the UK. If you're a director of a limited company, you'll need the NI for each director.
• Your business information: Including your business name, trading address, and contact details.
• Verification of subcontractors: If you plan to hire subcontractors, you'll need to verify their status with HMRC. This ensures you deduct the right amount of tax from their payments.

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How to register online

The easiest way to find and fill out a CIS registration form is through HMRC’s website, in the Construction Industry Scheme section. To access the CIS registration form, you’ll need to sign in using your Government Gateway account (or create one if you don’t have one already). Complete the registration form by providing all the information we touched on above, and make sure it’s all accurate and up-to-date to avoid any potential delays.

After submitting your application, HMRC will process your registration, and they may contact you to perform some verification checks. This can take a few days, and you might be asked to submit additional documents for verification. 

After a few days, you'll receive a confirmation letter or an email with your unique CIS reference number. Make sure you keep a record of this number, as you’ll need to use it in all communications with HMRC related to the CIS.

Understanding your responsibilities once you’re registered for the CIS

Congratulations! You're now registered under the Construction Industry Scheme. Just remember - your responsibilities don't end with registration. Particularly if you’re a registered contractor, you have certain obligations to fulfil, such as:

• Verifying subcontractors with HMRC before making any payments to them
• Deducting the appropriate amount of tax from subcontractor payments, and sending it to HMRC
• Preparing and submitting your CIS returns regularly, detailing payments made to subcontractors as well as the amount of tax deducted
• Keeping accurate records of all transactions and relevant documents for at least six years

‍Always seek professional guidance

While the process of registering for CIS online may seem straightforward, it's essential to ensure everything is done correctly to avoid potential issues in the future - and to make sure you understand what your responsibilities will be going forwards. 

An experienced accountant will not only guide you through the registration process but also help you manage your tax obligations, maintain records and provide valuable financial insights for your business.

The UK government also operates a helpline for general enquiries about the CIS, which is a helpful way to get direct answers to all your questions while registering. 

Final thoughts

Registering for the CIS is a crucial step for contractors in the UK. By following the steps outlined in this guide, you can easily navigate the CIS registration process while staying on top of HMRC regulations. 

If you’re unsure about any part of the registration process - or have any questions related to the CIS and your responsibilities after registering - we’d recommend getting support from a reputable accountant or tax advisor, who can offer you expert financial help and advice. 

With your CIS registration completed, you can focus on growing your construction business with confidence and peace of mind. Good luck!

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