What is CIS Scheme?

The Construction Industry Scheme (CIS) is an HMRC tax-deduction scheme for the construction sector. Contractors must register with HMRC and deduct money from subcontractors' payments before paying them — 20% for registered subcontractors and 30% for unregistered ones — and pass the deducted amounts to HMRC as advance payments against the subcontractor's tax and National Insurance. Subcontractors can register to reduce the deduction rate or apply for gross payment status if they meet turnover and compliance thresholds.