CIS ― overview

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

CIS ― overview

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
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The construction industry scheme (CIS) was devised in the early 1970s to limit the amount of tax lost as a result of under-declarations or failures to notify chargeability by subcontractors, many of whom came to work in the UK for relatively short periods without paying any tax.

The scheme operates to withhold tax at source at the point of payment, thereby reducing the risk of a subsequent default by the subcontractor ― although if the subcontractor can prove they have complied with their tax obligations, they are able to receive payments gross. CIS potentially requires deductions to be made at source from payments due to self-employed subcontractor construction businesses, a feature which is unusual within the UK tax system.

The scheme has undergone regular changes since its inception, and the current regime came into effect on 6 April 2007.

For the interaction between the quarterly reporting requirements for employment intermediaries and the CIS, see the end of this guidance note.

Construction industry scheme

In order to discuss the CIS, it is important to define the terms.

Contractors

Only

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  • 12 Oct 2026 15:05

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