19 articles

CIS Basics

Practical guides on cis basics for UK construction subcontractors and contractors.

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CIS Basics
Do Construction Companies Survive Better or Worse Than the UK Average?
Insolvency headlines suggest construction is the UK's most fragile sector. ONS Business Demography survival data tells a more complete story: of the construction companies born in 2019, 43.3% were still trading five years later in 2024, against 38.4% across all UK industries. This article works through the full cohort-by-cohort survival series compiled in our UK Construction Survival Index, explains why a better-than-average survival rate does not contradict rising insolvency counts, and sets out what the pattern means for a trade business owner planning for the long term.
23 July 20267 min read
CIS Basics
The State of UK Construction Business 2026
Two proprietary datasets, drawn entirely from Companies House and Insolvency Service public records, reveal the real picture of UK construction in 2026. Electricians and plumbers lead company formation at over 7,000 new firms each per year. A March incorporation spike, running about 15% above the monthly average across the decade, points directly to the 6 April tax deadline. And trailing-twelve-month insolvencies stand at 4,038, up 49.9% over a decade, with creditors voluntary liquidations accounting for around three quarters of all cases. This article works through what each of those numbers means for a CIS subcontractor or trade business owner making decisions about structure, payment terms, and financial risk.
20 July 202611 min read
CIS Basics
Which Construction Trades Are Going Limited? Company Incorporations by Trade Ranked
Companies House data for 2025 shows that electricians and plumbers are incorporating at a scale that dwarfs every other trade, while joiners are growing fastest on a year-on-year basis. But volume alone does not tell a subcontractor what to do. This piece ranks all eight core trades by 2025 incorporations, traces their decade-long growth, and sets the numbers alongside the limited-vs-sole-trader tax decision that each trade's typical profit profile shapes.
20 July 202613 min read
CIS Basics
CIS and Mortgages: How Lenders Treat CIS Income and What You Need to Apply
CIS subcontractors face a specific problem when applying for a mortgage. Most mainstream lenders read net receipts rather than gross CIS earnings, which shrinks the income figure used for affordability by 20% or more before a single expense is claimed. This guide explains how lenders assess CIS income, what documents you need, how your SA302s and Self Assessment returns feed the application, and what you can do to put your best case forward.
12 June 20269 min read
CIS Basics
CIS Registration for Contractors: Step-by-Step Guide 2026/27
Registering as a CIS contractor is not the same as registering as a subcontractor. The process, the trigger event and the ongoing obligations are all different. This guide covers who must register as a contractor, what you need before you start, the step-by-step HMRC registration process, and the April 2026 due-diligence duties that apply from day one.
12 June 20267 min read
CIS Basics
CIS Deduction Rates: 20%, 30% and Gross Payment Status Explained
The Construction Industry Scheme operates three deduction rates: 0% for subcontractors with Gross Payment Status, 20% for registered subcontractors, and 30% for unregistered ones. Crucially, the deduction only applies to the labour element of an invoice, not the materials. This guide explains all three rates, shows exactly how the deduction base works with a worked invoice example, and explains why over-deduction across a tax year typically means money back.
12 June 20268 min read
CIS Basics
CIS Employment Status: How HMRC Tests Whether You Are Self-Employed or Employed
CIS does not automatically make a worker self-employed. HMRC applies a three-part employment status test, and getting it wrong exposes a contractor to backdated employer NIC at 15%, PAYE penalties, and the loss of Gross Payment Status. This guide explains the three tests, the CEST tool, the false self-employment risk and what a genuinely self-employed CIS subcontractor looks like.
12 June 20267 min read
CIS Basics
CIS for Partnerships: Registration, UTR, Deductions and Self Assessment
A construction partnership registers for CIS as a single entity using the partnership UTR, suffers deductions at the partnership level, and then allocates profits and the corresponding CIS deducted to each partner on their individual Self Assessment returns. This guide covers CIS304 registration, how the deduction base works for a partnership, the GPS turnover test, what happens when partners join or leave, and how to convert from a partnership to a limited company without losing coverage.
12 June 20269 min read
CIS Basics
CIS Invoice Splitting: How to Correctly Separate Labour and Materials
Under CIS, deductions apply to labour only. Materials you buy for a job are excluded from the deduction base. Getting the split right on every invoice is the single most effective step a subcontractor can take to avoid being over-deducted, and the difference adds up to thousands of pounds a year.
12 June 20269 min read
CIS Basics
6 CIS Mistakes That Cost Subcontractors Money Every Year
Most CIS subcontractors overpay HMRC every year without realising it. This guide walks through the six most common and most expensive mistakes, with worked cost figures for each, and explains exactly how to put each one right.
12 June 20268 min read
CIS Basics
CIS National Insurance: Class 2, Class 4 and Employer NIC for Construction Workers
CIS deductions are advance income tax payments, not National Insurance. This guide explains which NI classes apply to sole-trader subcontractors (Class 2 and Class 4) and to limited-company directors in construction (employer NIC), with worked examples for 2026/27 and a clear explanation of why a large NI bill can still sit behind a year of CIS deductions.
12 June 20269 min read
CIS Basics
CIS: Sole Trader or Limited Company, Which Structure Works Better?
For a CIS subcontractor the sole-trader-versus-limited-company choice is not the generic one most articles describe. It turns on three things that are specific to the Construction Industry Scheme: how and when you get your over-deducted CIS money back, how the gross payment status turnover test is measured for your entity type, and how the 2026/27 tax arithmetic actually falls once you account for employer National Insurance and the higher dividend rates. This guide works through all three with real numbers.
12 June 202613 min read

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