CIS Deductions: What do the CIS deductions mean?


All contractors are required to make tax deductions from sub-contractors registered and working under the Construction Industry Scheme.


The Construction Industry Scheme has been developed to ensure those working in the UK as subcontractors within the construction industry are paying the correct levels of tax to HM Revenue & Customs. However, if you are newly registered under the scheme, what do the CIS deductions mean and how will it affect you?


The scheme has 3 types of CIS deductions, dependant on your circumstances and the information provided:

  1. Typically, all subcontractors registered under the scheme are automatically assigned to the standard CIS deductions rate of 20%, this means 20% of the subcontractor's income will be paid to HMRC on the subcontractor’s behalf as tax (in the form of a CIS deduction)
  2. In some instances, subcontractors may be assigned to the higher 30% CIS deduction rate. This CIS deduction rate is typically applied when a subcontractor:
  3. Is not registered with CIS deduction
  4. Cannot be verified
  5. Has not provided the same information as registration


Providing the right information upon registration and appointment will ensure your CIS tax deductions are kept to the correct amount.


  1. Finally, CIS tax deductions can be removed all together. In this instance, Subcontractors can apply for “gross payment status” which means the subcontractor will no longer have CIS returns made on their behalf and they are responsible for paying all their tax and National Insurance at the end of the tax year.


If you are a subcontractor and would like to find out more about your Construction Industry Scheme deductions or to discuss your payroll requirements, then please contact Bishopsgate team to see how they can help you. Call today on 0203 019 4990 or email us at