Guide
CIS for tradespeople: the Construction Industry Scheme explained
Updated 2 October 2026 · 4 minute read
If you do construction work for another contractor, CIS decides how much of each payment you actually receive. Here's how it works and what changed in April 2026.
Who it applies to
CIS covers most construction work done for a contractor: building, alterations, repairs, decorating, demolition and installing systems like heating and wiring in buildings. Some work is outside it, including carpet fitting, architecture and surveying, scaffolding hire without labour, and making or delivering materials. Work you do directly for homeowners isn't covered by CIS.
The deduction rates
| Your status | Deducted from your labour |
|---|---|
| Registered subcontractor | 20% |
| Not registered | 30% |
| Gross payment status | 0% |
Deductions aren't an extra tax. They count towards your income tax and National Insurance, and they're reconciled on your Self Assessment return, so keep every payment and deduction statement your contractors send you.
How to register
Register as a subcontractor with HMRC. You'll need your UTR, so register for Self Assessment first if you haven't already. Contractors check your status with HMRC before paying you.
Gross payment status
With gross payment status, contractors pay you in full and you pay your tax through Self Assessment. For a sole trader, you need construction turnover of at least £30,000 a year, excluding VAT and materials, and a good record of paying tax and filing on time.
What changed in April 2026
- HMRC can remove gross payment status immediately if a business knew, or should have known, that a payment was connected to fraud. The bar on reapplying has risen from one year to five.
- Contractors must file nil returns again in months when they make no payments.
VAT and CIS
If you're VAT-registered and work for VAT-registered contractors under CIS, the domestic reverse charge usually applies: the contractor accounts for the VAT, not you. See should I register for VAT?
For everything else you need to set up, see our going self-employed checklist.
See what yours would look like
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Sources
- GOV.UK: what you must do as a CIS subcontractor
- GOV.UK: CIS gross payment status
- GOV.UK: work covered by CIS
- GOV.UK: tackling Construction Industry Scheme fraud (April 2026)
- GOV.UK: CIS simplification and administrative improvements
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