CIS tax for subcontractors: the plain-English 2026 guide
What CIS is, when you need to register, how the 20% and 30% deductions work, and how to reclaim overpaid CIS at year end.
The Construction Industry Scheme (CIS) trips up more sole traders than any other bit of UK tax law. It's actually quite simple once you strip out the HMRC-speak.
Who has to register
Any subcontractor doing construction work for a contractor in the UK. Not registering doesn't get you out of it — it just means the contractor deducts 30% instead of 20% before paying you.
The three deduction rates
- 20% — you're registered and verified. Default for most subbies.
- 30% — you're not registered, or HMRC can't verify you.
- 0% (gross payment status) — turnover over £30k per director/partner and a clean tax record. Worth applying for.
What counts as 'construction'
Site prep, alterations, dismantling, repairs, decorating, plus installing heating, lighting, power, water and ventilation. Architects, surveyors and scaffold hire (without labour) are outside CIS.
Reclaiming overpaid CIS
Limited companies offset CIS against PAYE monthly. Sole traders reclaim it via Self Assessment. Keep every CIS statement — no statement, no reclaim.
How Cole helps
Cole tracks CIS deductions on every subbie invoice, exports monthly CIS300 returns for your contractor, and generates the payment and deduction statements HMRC requires you to hand out within 14 days.