Can I be employed and a CIS subcontractor at the same time?

Yes. In 2026-27 you can hold a PAYE job and do self-employed CIS work, but the CIS side needs a Self Assessment tax return, where your wages and profit are added together and your deductions set against the bill.

GOV.UK says you can run a business and be employed at the same time, for example working for an employer during the day and running your own business in the evenings. For a tradesperson that might be a maintenance job on the books in the week, then labour-only work for a local builder under the Construction Industry Scheme (CIS).

How each side is taxed

CIS 340 is firm on the fourth row: CIS payments must not go on the employment page of the return, because they are not earnings from a contract of employment.

Worked example

Dan lives outside Scotland and works for a maintenance firm on £20,000 a year with tax code 1257L. GOV.UK says that is the code used for most people with one job, and it gives his employer his full £12,570 personal allowance. Payroll takes £1,486 of Income Tax: 20% of the £7,430 above the allowance.

At weekends Dan does labour-only work for a builder, registered for CIS at 20%. In 2026-27 he is paid £15,000 gross, has £2,000 of costs, and so makes £13,000 profit. The builder deducts £3,000.

If Dan had no job, his personal allowance would sit against his CIS profit. Income Tax would be £86, Class 4 still £25.80, and £2,888.20 would come back. The job is why his refund is smaller: it has already used the allowance. Class 2 National Insurance is treated as paid, because his profit is above £7,105. GOV.UK says that when you are both employed and self-employed, the National Insurance due depends on your combined wages and self-employed work, and HMRC confirms it after you file.

What this means for you

Expect a smaller CIS refund than a subcontractor with no other income, and sometimes a bill. A well-paid job pushes more of your profit towards the £50,270 higher rate line (outside Scotland), and 40% is more than the 20% taken.

If you do owe, GOV.UK lets HMRC collect it through your tax code when you owe less than £3,000, already pay tax through PAYE, and file online by 30 December. It is then taken from your wages in equal instalments over 12 months. If you are due a refund, over-deducted CIS is claimed back through your tax return, which you can file from 6 April. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return and any refund is requested separately through HMRC online services.

Making Tax Digital looks only at your self-employment and property income before expenses. GOV.UK lists employment (PAYE) income as not counting. The April 2027 test uses 2025-26 income against £30,000, and the April 2028 test uses 2026-27 income against £20,000. If Dan's CIS work was on a similar scale in 2025-26, his turnover is under both lines, so he stays outside it for now.

Steps to get set up

1. Register for Self Assessment. GOV.UK says you must send a return if you earned more than £1,000 from self-employment, and tell HMRC by 5 October after the tax year if you are new.
2. Register for CIS as a subcontractor, so contractors take 20% rather than 30%.
3. Keep your P60 and payslips from the job, plus every CIS payment and deduction statement and your receipts for costs.
4. On the return, put wages on the employment pages and CIS gross pay and deductions on the self-employment pages.
5. File early, and check the calculation before you submit.
6. Watch your CIS turnover against the Making Tax Digital thresholds; your wages are left out.

The free MTD check shows whether and when Making Tax Digital applies to your CIS income, and the trades section has more for subcontractors.