How to register for CIS

You register for CIS with HMRC online, and which side you register on depends on what you do: as a subcontractor if you do construction work for other businesses, as a contractor if you pay subcontractors, or as both. Registering online as a subcontractor gives you net payment status, which means deductions at 20% instead of the 30% applied to anyone unregistered. You need your Unique Taxpayer Reference before you start, and if you haven’t got one, registering as a new business for Self Assessment gets you signed up for Self Assessment and CIS at the same time.

Do I need to register for CIS?

Work through it in this order.

Do you pay other people to do construction work? Then you must register as a contractor, and you have to do it before you take on your first subcontractor. Not after the first invoice. Before.

There’s a second route into contractor status that catches non-construction businesses out: if your business doesn’t do construction work but you’ve spent more than £3 million on construction in the 12 months since your first payment, you have to register too.

Do you do construction work for other businesses? You should register as a subcontractor. It isn’t compulsory in the way contractor registration is, but staying unregistered means 30% comes off your labour instead of 20%, and you gain absolutely nothing by it.

Do you only work directly for homeowners? Then CIS doesn’t touch you. A private domestic customer isn’t a contractor and makes no deductions.

Both? Register on both sides. Plenty of small firms subcontract to a main contractor and put their own subbies on jobs, and the two sets of obligations run independently.

What you need before you start

Have this in front of you or you’ll get halfway and stop:

your legal business name, and your trading name if it’s different

your Unique Taxpayer Reference (UTR) for the business

your VAT registration number, if you’re registered

the date you started trading

Depending on how you trade you may also need your National Insurance number, your Company Registration Number, partner details, or a Joint Venture agreement.

No UTR? Register as a new business for Self Assessment first. HMRC signs you up for Self Assessment and CIS at the same time, so it’s one job rather than two.

Registering as a subcontractor

The quickest route is online, and it registers you for net payment status. That’s the ordinary position: contractors deduct 20% from your labour and pay it to HMRC against your eventual bill.

There are postal forms instead if you’d rather, and which one you use depends on whether you’re a sole trader, a partnership or a limited company.

If you want to be paid in full with nothing deducted, that’s gross payment status, and it’s a separate application with turnover and compliance tests to pass. Online registration will not give it to you by default, so you have to ask.

Registering as a contractor

Register with HMRC as a contractor before you pay your first subcontractor. This sets you up with a PAYE scheme for CIS, and from that point you have three running obligations:

Verify every new subcontractor before their first payment, which is what tells you the rate.

Deduct at the rate HMRC gives you and issue a payment and deduction statement within 14 days of the tax month ending.

File a monthly return by the 19th of every month, including nil returns.

You also have to check whether someone should be an employee rather than a subcontractor. Getting that wrong is its own penalty, separate from anything in CIS.

What happens if you don’t register

For a subcontractor, nothing formal happens. You just pay for it: 30% instead of 20%.

Worked example

You invoice £4,000 of labour a month, and materials are billed separately.

Registered, at 20%, £800 comes off. Unregistered, at 30%, £1,200 comes off. That’s £400 a month, £4,800 across a year, sitting with HMRC that didn’t need to be.

You get it back at year end either way. But that’s £4,800 of working capital you didn’t have while you were buying materials and paying wages, and the only thing standing between you and it was a registration that takes minutes.

For a contractor, it’s more serious. Failing to register and file brings penalties starting at £100 for a single day’s lateness on a return, and HMRC can look at every payment you’ve made outside the scheme.

Common mistakes

Registering late as a contractor. The duty is before the first subcontractor payment, not before the first return is due.

Assuming subcontractor registration is optional in a way that costs nothing. It’s optional and it costs you 10% of your labour until you do it.

Starting without a UTR. Register for Self Assessment first and you get both at once.

Expecting gross payment status by default. Online registration gives net status. Gross is a separate application.

Registering as a subcontractor only, when you also pay subbies. Both sides, separately.

Do this in FieldHive

Once you’re registered the deductions start, and the useful habit is checking the figure before the invoice goes out rather than after the payment lands short. Use the CIS tax calculator to split labour from materials and see the deduction at 20% or 30%, then raise the invoice with the deduction and reverse charge handled together in the CIS and VAT invoice generator.

Aid, not advice

This guide explains how to register for CIS and what each side is signing up to. It is not tax advice. Whether someone on your job should be a subcontractor or an employee is a judgement with real consequences, so check with your accountant or HMRC before you take anyone on.

Registration routes, rates and thresholds checked on gov.uk August 2026: online registration gives net payment status; the £3 million non-construction threshold; CIS deduction rates 20% / 30% / 0%; the £100 late-return penalty.