The Construction Industry Scheme
The Full Story
The Construction Industry Scheme (CIS) is a set of tax rules for the building trade. If you’re a contractor, you need to take tax off your subcontractors’ payments and send it to HMRC. If you’re a subcontractor, this means tax is already taken from your pay before you get it. At the end of the year, these deductions go towards your tax bill — and in many cases, subcontractors are due a refund. At Your Accounting Club we specialise in construction admin, we understand the complexities HMRC impose on the industry. Get in touch for a no obligation quote.
Who Is Affected?
The Construction Industry Scheme (CIS) mainly affects contractors and subcontractors who work in the construction industry, including builders, labourers, and trades such as electricians, plumbers, and roofers. It applies to individuals, partnerships, and limited companies. However, not everyone in construction falls under CIS — the scheme does not cover payments for work such as architecture, surveying, scaffolding hire without labour, carpet fitting, or the delivery of materials. Businesses outside the construction industry that spend less than £3 million a year on construction work are generally not required to register as CIS contractors.
How We Help Contractors with CIS
A Construction Industry Scheme (CIS) return service helps contractors stay compliant with HMRC by managing the monthly reporting of payments made to subcontractors.
At Your Accounting Club, we help construction businesses keep their CIS records organised and ensure monthly returns are prepared and submitted correctly.
Our CIS support includes:
• Registering contractors and subcontractors for CIS
Assistance with registering with HMRC so contractors and subcontractors are correctly set up before payments begin.
• Subcontractor verification with HMRC
Verifying subcontractors with HMRC to confirm the correct deduction rate (0%, 20% or 30%).
• Calculating CIS deductions
Accurately calculating deductions from subcontractor payments in line with HMRC rules.
• Preparing and submitting monthly CIS returns
Ensuring CIS returns are prepared and submitted to HMRC on time each month.
• Providing subcontractor deduction statements
Producing the required deduction statements so subcontractors have records of the tax paid on their behalf.
• Support with gross payment status applications
Helping contractors understand the eligibility requirements and application process.
Construction Industry Support
Working in construction often means dealing with more than just CIS. Contractors and subcontractors must also navigate other HMRC rules that apply specifically to the building trade.
At Your Accounting Club, we regularly help construction businesses stay organised with the financial records and reporting required for:
CIS Returns
Preparation and submission of monthly CIS returns, subcontractor verification, deduction calculations and record keeping.
Domestic Reverse Charge for VAT
The reverse charge can be confusing for many contractors. We help ensure invoices and bookkeeping records correctly reflect the domestic reverse charge rules so VAT returns are prepared accurately.
Reduced Rate VAT for Building Work
Certain construction projects such as property renovations or conversions may qualify for reduced VAT rates. We help ensure the correct VAT treatment is recorded within your bookkeeping.
Payroll for Construction Businesses
Managing PAYE for site staff while also handling subcontractors under CIS can be complex. We help contractors keep both systems organised.
Cloud Bookkeeping for Builders
Using cloud accounting software like Xero makes it easier to track subcontractor payments, materials, VAT and project costs in one place.