The Construction Industry Scheme (CIS) is a set of rules HMRC uses to regulate payments from contractors to subcontractors in the construction industry. If you're a contractor, subcontractor, or a recruitment agency placing workers in construction, it's crucial to understand how CIS works and what it means for you. Let’s break it down in simple terms. What is CIS & Who Does It Apply To? CIS applies to contractors who hire subcontractors for construction work. This includes: ✅ Building and civil engineering work ✅ Site preparation, demolition, and repairs ✅ Installations like heating, lighting, and power systems ✅ Decorating and finishing work However, some activities don’t fall under CIS, such as: ❌ Architecture and surveying ❌ Scaffolding rental (if no labour is supplied) ❌ Material delivery Even if you’re not a construction company, you may still have to follow CIS rules if you spend over £3 million annually on construction work. For full details, check the official HMRC guidance: CISR14305 What This Means for Agencies & Contractors For Recruitment Agencies: If your agency supplies construction contractors, you need to know if CIS applies to them. If it does, payments must follow CIS tax deduction rules. Failing to deduct tax correctly can lead to serious HMRC penalties. For Contractors & Subcontractors: If you work in construction, CIS may apply to you. This means: If you're registered under CIS, contractors will deduct 20% tax before paying you If you’re NOT registered, contractors will deduct 30% tax—meaning you take home less You may be able to apply for "gross payment status" to receive full payments without deductions (but you must meet HMRC’s criteria) How TES Can Help At Trusted Employment Solutions (TES), we take the stress out of CIS compliance for both agencies and contractors: ✅ For Recruitment Agencies: We handle CIS payroll processing, ensuring your workers are paid correctly while keeping you compliant with HMRC. ✅ For Contractors & Subcontractors: We make sure your tax deductions are accurate and you receive the right payments on time. CIS can be confusing, but you don’t have to navigate it alone. Let TES manage your payroll, so you can focus on the job at hand.