16 articles

CIS Basics

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

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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 202612 min read
CIS Basics
CIS vs PAYE: Complete Tax and Take-Home Comparison for Construction Workers (2026/27)
CIS and PAYE are not two ways of paying the same tax. CIS treats you as a self-employed business that deducts its costs and settles up through Self Assessment, while PAYE treats you as an employee whose tax is finalised in-year and who carries no expense deduction but gains real employment rights. This pillar guide compares the two properly: the exact take-home at £35,000, £55,000 and £80,000 gross for 2026/27, the employment rights and pension value PAYE adds, the cash-flow difference, the false self-employment risk that can land a misclassified worker and contractor with a back-dated bill, and the Making Tax Digital threshold that is tested on gross CIS income before any deduction.
12 June 202612 min read
CIS Basics
CIS vs PAYE: the Key Differences for Construction Workers
Most construction workers end up on one of two payment systems: PAYE, where a contractor deducts income tax and National Insurance before paying wages, or CIS, where a contractor deducts a flat percentage from the labour element of each invoice. The two systems differ in how much is taken, how it is taken, who bears the risk, and crucially what you can get back at year end. This guide sets out the differences side by side and shows why most self-employed subcontractors systematically overpay under CIS.
12 June 202610 min read
CIS Basics
How to Register for CIS as a Subcontractor (Step by Step)
Registering for CIS is optional in law but essential in practice. An unregistered subcontractor has 30% deducted from every labour payment. A registered one pays 20%. This guide walks through both the subcontractor and contractor registration routes, what documents you need, how HMRC verifies you afterwards, and what the 0% Gross Payment Status upgrade looks like.
12 June 202611 min read

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