CIS ― overview

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

CIS ― overview

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
imgtext

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 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

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 18 Jun 2026 09:11

Popular Articles

Simple assessments

Simple assessmentsFrom 2016/17 onwards, HMRC has the power to make a ‘simple assessment’ of the taxpayer’s income tax and / or capital gains tax liability outside of the self assessment system. As HMRC already receives significant amounts of information on the income received and tax paid by

14 Jul 2020 13:40 | Produced by Tolley Read more Read more

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more Read more

Loans written off

Loans written offCompanies sometimes provide directors, employees or shareholders with low interest or interest-free loans either as part of the reward package or on special occasions to help the individual meet significant expenditure. The employment income implications of these loans are discussed

14 Jul 2020 12:11 | Produced by Tolley Read more Read more