Using CIS – A Guide For Workers

Your Guide To Using The Construction Industry Scheme

If you’re a self-employed construction worker, you’ve probably heard people talk about the Construction Industry Scheme (CIS). But what is it, exactly? How does it affect your pay, and is it worth signing up for?

So what is the Construction Industry Scheme? Launched by the government in 1999, CIS was designed to address tax evasion in the construction industry and ensure workers were paying the right amount of tax. Under this scheme, tax is deducted at source from your pay by us as your CIS payments provider, and we send it directly to HMRC. In essence, it’s similar to Pay As You Earn (PAYE) but for self-employed construction workers.

You don’t have to register for CIS if you work in the construction industry. But not registering means you would have more tax to pay. If you’re registered, you pay tax at 20%, but if you’re not registered, the rate jumps to 30%. A lower tax rate for CIS workers is the government’s way of incentivising people to join the scheme. So, if you want to keep more of what you earn, it pays to get registered.

Eligibility

• Not every job in construction qualifies for CIS. You’re likely to be eligible if you work in:
• Building & civil engineering
• Laying foundations or preparing sites
• Demolition and dismantling
• General building work, alterations or repairs
• Electrical, plumbing, heating, and ventilation systems installation
• Painting and decorating

It’s important to note that it’s not just about what you do, but also how you work. HMRC looks at the level of supervision, direction and control involved in your role. Essentially, the more independent you are, the more likely you are to qualify.

Still unsure? That’s why we offer a free Contractor Assessment – to help you find out if CIS suits your role and to keep things above board with HMRC.

Registering for CIS

It’s a straight-forward process. You simply go to HMRC’s website and complete the online form. Once registered you’ll receive a Unique Tax Reference (UTR) number, which you pass on to us so that we can deduct and pay your tax to HMRC. And that’s it – you’re in! You can register at any time, whether you’re fresh to contracting or a seasoned pro.

How Does Tax Work Under CIS?

Under CIS, just like with employees and PAYE, tax is taken from your payments before they hit your bank account. This makes your life easier when it comes to budgeting and staying compliant.

You still get your tax-free personal allowance, currently £12,570 (2025/26), just like someone on PAYE. National Insurance contributions aren’t deducted immediately; instead, they’re calculated when you submit your Self-Assessment Tax Return at the end of the year (when you may be able to claim a rebate for any allowable business expenses you may have incurred).

It’s important to note that, as your payments company, we retain a margin from your income. This is explained before you join us, with a detailed pay illustration so you know exactly what’s happening to your earnings. As the largest FCSA-accredited CIS payments provider, you can trust us to manage your payments correctly. Plus, with us, you’ve got the extra safeguard of SafeRec, which is a 3rd party independent verification that your pay has been processed as it should be.

Self-Assessment Tax Returns

At the end of the tax year (January 31st), you’ll need to submit a self-assessment tax return and declare any business expenses or other income sources. This will tell you if you owe more tax (on other income sources) or if you’re due a tax rebate based on your work-related expenses.

Our expert team can help you complete your tax return accurately and as soon as you’re ready – you don’t need to wait until January 31st – which means you can receive any rebate you’re due without delay.

Why CIS Makes Sense

CIS isn’t just about ticking a government box; it’s about working smarter and being tax efficient. With CIS, you’ll pay less tax, have clearer finances, more control over your tax, and possibly even a refund at the end of the year. Plus, with our CIS experts helping with compliance and admin, you get peace of mind and more time to focus on your work.

If you think CIS is right for you, get in touch on 01923 257257 to undergo our free contractor assessment. This takes only a few minutes and will confirm to you whether you are eligible. It’s also a great opportunity to talk to our expert team about any aspect of CIS, and to receive a detailed and tailored pay illustration so you can see exactly how your pay is calculated and what your take-home pay would be.