How to Register for the Construction Industry Scheme

PHS Team

22 Apr, 2025

Are you a contractor or subcontractor in the UK construction industry? Registering for the Construction Industry Scheme (CIS) can help you manage your taxes more easily and save money.

CIS is a system designed by HMRC to ensure taxes are deducted correctly from payments in the construction sector.

Whether you’re just starting or looking to start your tax process, CIS registration is essential for managing your finances and staying compliant with HMRC rules. By registering, you can reduce tax deductions, avoid penalties, and smooth your business operations. 

What is the Construction Industry Scheme?

The Construction Industry Scheme (CIS) is a tax deduction system in which contractors are required to deduct a portion of subcontractors' payments and forward it to HM Revenue and Customs (HMRC). 

These deductions act as advance payments toward the subcontractor’s tax and National Insurance obligations.

CIS ensures that taxes are deducted at the source from subcontractors' payments and sent directly to HMRC.

By registering for CIS, subcontractors can reduce their tax deductions and simplify their financial management.

Who Needs to Register for CIS?

CIS applies to anyone involved in construction work in the UK. Here’s who should register:

• Contractors: If you pay subcontractors for construction work, you must register as a contractor.
• Subcontractors: If you provide construction services, registering ensures lower tax deductions.
• Dual Roles: Some businesses act as both contractors and subcontractors. In this case, you’ll need to register separately for each role.

What type of construction work does the CIS apply to?

The Construction Industry Scheme (CIS) applies to a wide range of construction work, including tasks like site preparation, building construction, alterations, repairs, demolition, and dismantling. 

It covers both permanent and temporary works and includes the installation of systems like heating, lighting, and ventilation. Essentially, any activity involving the construction, alteration, repair, or demolition of buildings or structures typically falls under the CIS umbrella.

Step-by-Step Guide to CIS Registration

Follow these simple steps to register for CIS:

Step 1: Prepare Your Information

Before starting the registration process, gather the following:

• National Insurance number.
• Unique Taxpayer Reference (UTR) number.
• Business details (e.g., name, address).

Step 2: Register for HMRC Online Services

1. Visit HMRC’s website and create an account.
2. Enrol as self-employed if you haven’t already. This will provide you with a Government Gateway ID and UTR number.

Step 3: Register for CIS

1. Log in to your HMRC account using your Government Gateway credentials.
2. Select the option to register for the Construction Industry Scheme.
3. Follow the on-screen instructions and submit your application.

Step 4: Choose Your Payment Status

When registering, you’ll need to decide between two payment statuses:

Common Mistakes During Registration

Avoid these common errors when registering for CIS:

1. Misclassifying yourself as a contractor or subcontractor.
2. Inaccurate details like UTR and National Insurance number.
3. Contractors must verify subcontractors with HMRC before making payments.

These errors can lead to penalties and compliance issues with HMRC. Ensuring accurate classification, complete information, and proper subcontractor verification is necessary for a smooth CIS registration process.

What Happens After Registration?

Once registered, here’s what you can expect:

For Contractors

• You must verify all subcontractors with HMRC before paying them.
• Submit monthly returns detailing payments made and deductions taken.

For Subcontractors

• If registered under net payment status, contractors will deduct 20% from your earnings and send it to HMRC.
• If approved for gross payment status, you’ll receive full payments but must handle your taxes through self-assessment.

Benefits of CIS Registration

Registering under the Construction Industry Scheme offers several advantages:

• Registered subcontractors only have 20% deducted compared to 30% for unregistered ones.
• Avoid penalties and maintain a clean tax record.
• Spread your tax contributions throughout the year rather than paying a lump sum at year-end.
• Many clients prefer working with registered contractors and subcontractors due to compliance assurance.

Registering for the Construction Industry Scheme is essential if you work in the UK construction sector. It ensures compliance with tax laws, reduces unnecessary deductions, and opens doors to more business opportunities.

If you're a contractor or subcontractor looking to register for the Construction Industry Scheme (CIS), PHS is here to help. We handle the entire CIS registration process, ensuring you're set up correctly with HMRC. 

Whether you're deducting tax as a contractor or having it deducted as a subcontractor, our expert team makes it quick and hassle-free. Avoid penalties and stay compliant with CIS rules. Contact us at 0208 8611685  and email info@phs-uk.co.uk. Get in touch today to register with confidence and focus on building your business.