Updated Construction Industry Scheme (CIS) guidance: five things subcontractors need to know

Our main guidance page on the Construction Industry Scheme has been enhanced and expanded! Check it out for help and support with the following issues: 

• Your employment status – including if you work through an agency or umbrella company. Contrary to popular belief, you are not automatically self-employed just because you work in construction. In some instances, it might be more appropriate for your contractor or engager to treat you as an employee and pay you under PAYE. 
• What to do if your contractor hasn’t reported or paid your CIS deductions to HMRC – this includes a link to the relevant legislation that says that HMRC should credit a worker’s record where CIS has been deducted (and the worker has proof) but it isn’t paid over to HMRC. 
• VAT– how it works if you are a subcontractor, including examples and help with how the VAT reverse charge and Flat Rate Scheme interact. 
• Unscrupulous agents – because subcontractors are often due CIS and/or VAT repayments, we understand that certain agents may be pressuring subcontractors to use their services as they stand to benefit financially. Be aware that some unscrupulous agents may try to maximise the refunds you receive and may even attempt to register you for VAT without fully explaining the responsibilities of being VAT registered. Do not allow an agent to register you for VAT without your full understanding and informed consent.
• Making Tax Digital for income tax (MTD) – subcontractors are estimated to be one of the largest groups of taxpayers affected by Making Tax Digital for the 2026/27 tax year. Making Tax Digital for income tax is a new system for recording and reporting your income and expenses for some self-employed individuals. If it applies to you, you will need to use compatible commercial software to keep digital records, submit quarterly updates to HMRC and submit an annual year-end tax return using commercial Making Tax Digital software. 

These updates are on top of the guidance that is already there, covering areas like registering for CIS, getting your pay and deduction statements, completing a tax return, understanding your employment rights and deciding whether to operate through a limited company! 

Our main Construction Industry Scheme page can be found here. And of course, we also have our dedicated page looking at CIS refunds. 

If you are a CIS worker and there is something that we haven’t covered in our guidance or an issue that you think we should be aware of to help inform our work, please contact us.