Construction Industry Scheme (CIS) Tax Advice

At Chartergates, we specialise in providing comprehensive legal support to clients in the construction industry, particularly in navigating the intricacies of the Construction Industry Scheme (CIS). Whether you are involved in permanent or temporary construction work, be it in the private sector, civil buildings, or public facilities, our team of experienced CIS consultants are here to assist you.

Our Expertise in CIS Matters

Our CIS Consultants are immersed in the construction industry’s dynamics, advising in its many differing and specific areas such as construction, repair, demolition, alterations, property development and decoration. We understand the challenges that come with CIS compliance and are dedicated to offering decisive advice and actions to help you overcome the complexities seamlessly.

HMRC Compliance and Challenges

The construction industry is under constant compliance scrutiny from HMRC. Unlike any other sector, the construction industry operates under its unique tax deduction system. HMRC continues to intensify its focus on the construction sector, with specialist teams, increasing investigations, and yielding a significant ‘tax take’ from compliance checks.

How Our CIS Tax Advice Help

Person looking at Construction Industry Scheme (CIS) Tax Advice

Our experienced consultants are ready and able to provide the technical and commercial advice your business needs to navigate the CIS regime with confidence, allowing you to rest easy knowing that you are compliant. Equally if you find yourself in a dispute with HMRC regarding CIS issues, Chartergates is your go-to partner. Our team can assist you with a range of issues, including:

· Failure to make deductions from a subcontractor

· Failure to verify a subcontractor

· Not deducting enough tax due to excessive materials claims

· Disputes about whether CIS applies

· Loss of your gross payment status

Early Intervention Matters

Timing is crucial when dealing with CIS issues. Strict time limits for appeal and a set order of essential steps must be followed to avoid being found liable for your subcontractor’s tax liability. Contact us early on to ensure you are on the right track and safeguard your interests.

Our Approach

We operate on a transparent and client-friendly basis. We offer a variety of fee options including retained advice and representation, an hourly rate and in some circumstances contingency fee arrangements. Additionally, we provide a free, no-obligation discussion to explore your specific needs.

Our Tax Services & How We Provide Them

Our specialist tax consultancy and representation services can be provided on a fixed-fee basis, an hourly rate, on a retained basis and in some circumstances on a contingency basis. Call us today for a free no obligation consultation with our team about our services which include:

Advice and consultancy on all areas of tax
HMRC enquiry representation
Tax tribunal representation

Contract reviews and drafting
Paper reviews for ongoing disputes

What Is the Construction Industry Scheme CIS?

The Construction Industry Scheme CIS is a set of HMRC rules that affects how payments are made within the construction industry. It applies when contractors pay subcontractors for certain types of construction work.

Instead of paying the full invoice amount without adjustment, the contractor may need to make CIS deductions and pay those deductions directly to HMRC.

Why CIS Deductions Matter

These deductions are treated as advance payments towards the subcontractor’s tax and National Insurance position. This means CIS can have a direct impact on cash flow, tax compliance, and how construction businesses manage their payment processes.

For contractors, mistakes can lead to HMRC penalties and unexpected liabilities. For subcontractors, incorrect deductions can create cash flow pressure and tax reporting issues.

Who CIS Can Apply To

CIS can apply to a wide range of businesses and working arrangements. A contractor may be a large construction company, a property developer, a limited company, or even a business outside the construction sector that meets the deemed contractor rules.

A subcontractor may also operate as a sole trader, partnership, or limited company.

CIS Is Not Limited to Large Contractors

Businesses should not assume CIS only applies to traditional building contractors. If a business carries out construction work, or pays subcontractors for construction work, it may need to register with HMRC.

It may also need to verify subcontractors, make the correct tax deductions, and submit a monthly return to HMRC.

The Risk of Getting CIS Wrong

Getting CIS wrong can lead to penalties, unexpected liabilities, and HMRC compliance checks. Problems often arise when businesses misunderstand whether CIS applies, fail to deduct tax correctly, or miss monthly return deadlines.

For this reason, both contractors and subcontractors should take CIS seriously and seek professional advice where there is uncertainty.

Support

Practical CIS Guidance for Your Business

CIS compliance can be technical, but early advice can prevent costly mistakes.

Whether you are dealing with registration, tax deductions, monthly returns, gross payment status, or an HMRC investigation, Chartergates can provide clear guidance tailored to your position.

Understand the exemption

Finding help

How Chartergates Can Help With CIS Issues

At Chartergates, we help construction businesses, contractors, subcontractors, and deemed contractors understand and manage their Construction Industry Scheme CIS obligations.

Our team can advise on whether CIS applies, how the rules affect your business, and what action may be needed to remain compliant.

Contractor Registration and CIS Compliance

We can assist contractors that need to register for CIS, verify subcontractors, calculate CIS deductions, deduct tax correctly, and submit accurate monthly returns to HMRC.

We can also help businesses review historic CIS treatment where there may be concerns about errors, missed deductions, or incorrect reporting.

Support With Gross Payment Status

For subcontractors, we can provide advice on CIS deductions, payment disputes, and applications for gross payment status.

If you want to apply for gross payment status, we can help you understand the conditions HMRC will consider, including compliance history and the relevant 12 months of tax behaviour.

Advice for Deemed Contractors

We also advise businesses that may fall within the deemed contractor rules.

This includes organisations that are not traditional construction companies but still spend significant amounts on construction operations, including local authorities, property businesses, and a local education authority.

Help With HMRC CIS Enquiries

Where HMRC has opened an enquiry or challenged your CIS treatment, Chartergates can support you through the process.

We can review the facts, communicate with HMRC, and help you reach a clear and practical resolution.

Need advice on CIS?

Speak to our tax and employment law specialists before the agreement is finalised or the payment is processed.

Our approach

Chartergates’ four pillars of service

Complete

We advise, prepare documentation and represent our clients, providing support from the initial review through to the resolution of enquiries and disputes.

Commercial

We provide clear, practical advice that reflects the commercial realities of our clients’ businesses.

Confident

Our experience of HMRC enquiries and Tribunal proceedings allows us to provide informed, practical and up-to-date advice.

Co-operative

We work closely with clients and their professional advisers to manage risk, meet their obligations and achieve the best possible outcome.

Speak to Chartergates

Get clear advice from our specialists

Incorrect treatment can result in additional tax, National Insurance, interest and penalties. Speak to Chartergates for clear, practical advice tailored to your circumstances.

This wording is broad enough for CIS, employment tax, status, termination payments, tax enquiries and other Chartergates service pages.

FAQs

CIS Questions

Common questions about the Construction Industry Scheme (CIS)

What is the Construction Industry Scheme (CIS) and who does it apply to?

The Construction Industry Scheme (CIS) is a tax regime created by HMRC for construction businesses, including contractors and subcontractors. It requires contractors to deduct tax from payments made to subcontractors and pass these CIS deductions to HMRC. It applies to most construction work in the UK, including work done by limited companies, sole traders, and property developers.

How do I register with HMRC under the CIS?

To be paid correctly under the CIS, subcontractors must register with HMRC either online or by phone. You’ll need your national insurance number, Unique Taxpayer Reference (UTR), and relevant business details. Failing to register means contractors may be required to deduct tax at a higher rate when receiving payment.

What happens if a subcontractor is not registered with HMRC?

If a subcontractor is not registered, the contractor must deduct tax at the higher rate of 30% rather than the standard 20%. This can significantly impact cash flow for subcontractors. Our consultants can help with CIS registration and regularisation of your tax position to minimise future deductions.

What are deemed contractors, and how do they differ from mainstream contractors?

Deemed contractors are businesses that don’t normally work in construction but spend large amounts on construction activity. Once a certain spending threshold is crossed in a tax year, they must follow CIS rules like mainstream contractors, including verifying subcontractors and making tax deductions.

What documents should contractors provide to subcontractors under CIS?

Contractors must provide payment and deduction statements to each subcontractor for every payment made. These statements show the amount paid, the CIS deductions made, and other necessary details for the subcontractor to manage their income tax and national insurance contributions.

Can CIS affect my advance payments or cash flow?

Yes. If you are a subcontractor and tax is deducted at source, your advance payments can be significantly reduced, impacting your working capital. We help you assess your position, including eligibility for gross payment status, which allows you to receive full payments without deductions.

How can I dispute a CIS-related issue with HMRC?

Disputes may arise if HMRC claims you failed to make proper deductions, verify a subcontractor, or incorrectly assess whether CIS applies. In such cases, Chartergates can assist by analysing your records, appealing any penalties, and representing you in negotiations—or if necessary, at a tax tribunal.

What are the common CIS compliance mistakes made by construction businesses?

Frequent issues include failing to verify subcontractors, making inaccurate CIS deductions, excessive claims for materials, and not applying CIS when required. Construction businesses must keep thorough records and follow HMRC’s procedures carefully to avoid penalties or liability for unpaid tax.

Are sole traders treated differently under CIS?

Sole traders are treated like any other subcontractor under the CIS. If you’re a sole trader providing construction services, you’ll need to register with HMRC and ensure that your contractor is making the correct tax deductions. We can help you stay compliant and recover overpaid tax at the end of the tax year.

Why is early intervention important when facing CIS issues?

When problems arise—such as loss of gross payment status or disputes over CIS registration—early legal advice can prevent escalation. There are strict deadlines to respond to HMRC, and prompt action can increase your chances of a successful resolution. Our consultants can guide you every step of the way.

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