How do I register for CIS as a subcontractor?

Register online with HMRC using your Unique Taxpayer Reference (UTR). No UTR yet? Register for Self Assessment as a subcontractor and HMRC sets up both. Once registered, contractors deduct 20% from your labour, not 30% (GOV.UK, October 2026).

The Construction Industry Scheme (CIS) makes contractors take money off your pay and send it to HMRC as an advance payment towards your tax and National Insurance. Registering does not stop the deductions. It lowers them, and it means the money is tracked against your name so you can claim back anything overpaid through your tax return.

Who needs to register

GOV.UK says you should register if you work for a contractor and you are a sole trader, a partner, or the owner of a limited company. You do not register if you are an employee. If you also pay subcontractors yourself, you must register as a contractor too.

The deduction rates

Deductions only come off labour. GOV.UK says contractors do not deduct CIS from VAT, materials you paid for, plant hired for the job, consumable stores, or manufacturing or prefabricating materials. Your contractor may ask for receipts for materials.

A worked example. Over a year you invoice £40,000 of labour. Registered and verified, £8,000 is deducted at 20%. Unregistered, £12,000 is deducted at 30%. That is £4,000 more held by HMRC until you file your tax return.

What you need before you start

• your legal business name, and your trading name if it is different
• your UTR
• your VAT registration number, if you are VAT-registered
• the date you started trading
• your National Insurance number, depending on your circumstances

GOV.UK warns that you could be fined for giving false information, and so could anyone who helps you do it.

Steps to register for CIS

1. Check you are self-employed, not an employee. GOV.UK has an employment status checker if you are not sure.
2. If you have no UTR, register as a new business for Self Assessment and choose "working as a subcontractor" when asked. This registers you for Self Assessment and CIS together.
3. If you already have a UTR, sign in to the online CIS registration service and register. This gives you net payment status, the 20% rate.
4. If you cannot register online, fill in the postal form for sole traders (CIS301) instead.
5. Give each contractor the exact name and UTR you registered with, so they can verify you before they pay you.
6. Keep every monthly payment and deduction statement. Contractors must give you one within 14 days of the end of each tax month.

HMRC's "Check when you can expect a reply from HMRC" tool shows current waiting times for new Self Assessment and CIS registrations. It is updated every week.

What this means for you

If you are already working for a contractor and have not registered, you are losing 30% of your labour pay in deductions. Register now and the rate drops to 20% once your contractor can verify you.

Registering for CIS also starts your record with HMRC. The deductions you pay are not lost: they count towards your tax bill for the year. If too much has been taken, HMRC repays the difference after you file your tax return. There is no refund during the year for a trading sole trader.

Keep good records from day one. Your gross pay, before deductions, is your income. Your deductions are what HMRC has already received from you.

Gross payment status

Gross payment status means contractors pay you in full and you pay all your tax at the end of the year. To qualify as a sole trader you must show you have paid tax and National Insurance on time, do construction work in the UK, run the business through a bank account, and have turnover of at least £30,000 over the last 12 months, ignoring VAT and materials.

HMRC reviews gross payment status every year. From 6 April 2026 it can cancel it straight away where a business knew, or should have known, a payment was connected to fraud.

Making Tax Digital and CIS

Your gross CIS pay counts towards the income test for Making Tax Digital for Income Tax (MTD). If your turnover before expenses was over £30,000 on your 2025-26 tax return, you start MTD on 6 April 2027. Use the free MTD check to see where you stand, and the trades section for more guides on CIS and tax for the building trades.