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Construction Industry Scheme (CIS)

CIS (short for “Construction Industry Scheme”) is HMRC’s way of collecting income tax from people who subcontractors in the construction industry.

Because in the past many self-employed construction workers were paid in cash, HMRC created the Construction Industry Scheme in 1971 so it can tax subcontractors’ earnings as soon as they are paid out by their contractors.

Why you should register for CIS if you’re working as a subcontractor in construction:

  • if you’re registered for the scheme, you will have a 20% tax deducted from your salary
  • if you’re not registered, the deduction is 30% instead.

Because this is usually more than you should pay in tax, you can claim back a CIS tax rebate from HMRC in April of the following tax year. For most CIS construction workers, the average refund is £2,500.

However, if you’re a full-time employee, the CIS scheme does not apply to you. Check with your company.

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