CIS is how HMRC collects tax at source in UK construction. When a contractor pays a subcontractor for construction work, they deduct tax from the labour element and pass it to HMRC. The subcontractor then reclaims it through their return. It applies to most building, civil, electrical, plumbing, roofing, groundwork and finishing work.

Registered subcontractors have 20% deducted from labour. If you are not registered with HMRC for CIS, the rate jumps to 30%. Only labour is deducted, not materials or VAT. Registering is quick and drops you to 20%, so it is worth doing before your next payment.

Often, yes. CIS is taken off your gross labour before your expenses and personal allowance are counted. Once your real tax bill is worked out, the tax already deducted is frequently more than you owe. That gap comes back as a refund. Our estimator above gives you a first read, and we reclaim the full amount when we prepare your return.

You need to pass three tests: a turnover test (£30,000 of labour turnover per director or partner, or £100,000 across the business), a compliance test on your tax history, and a business test. Once granted, you are paid in full with no deduction, which transforms cashflow. We apply for it and then protect it, because it is withdrawn for patterns across CIS, PAYE and VAT, not single mistakes.

Since March 2021, most CIS-registered construction services between VAT-registered businesses fall under the domestic reverse charge. The customer accounts for the VAT, not you. Getting this wrong is a common and expensive error. We set your invoicing and returns up so it is applied correctly every time.

If a business spends more than £3m on construction in a rolling twelve months, it becomes a deemed contractor and takes on full CIS obligations, even if construction is not its main trade. Property investors, retail chains and developers using SPVs get caught by this. We monitor the threshold so it never becomes a backdated bill.

Yes, and the next wave is the one that catches most of construction. The £50,000 threshold has applied since 6 April 2026. From 6 April 2027 it drops to £30,000, and to £20,000 from April 2028, which pulls in most working subcontractors. HMRC decides from the income on your 2025/26 return, due by 31 January 2027, so the groundwork starts now. We get your records digital and that return clean, then handle the quarterly updates (7 August, 7 November, 7 February and 7 May) so April 2027 is a non-event rather than a deadline.