How Do I Register for the Construction Industry Scheme as an Umbrella Contractor?

What is the Construction Industry Scheme?

CIS is a tax deduction scheme – it is sometimes mistaken for being an additional tax, but it’s more like an upfront tax system.

With HMRC fearing that dishonest subcontractors may not declare the money earned from working for bigger companies, the scheme is designed to reduce levels of fraud and tax evasion.

It’s also used to help certain subcontractors spread their tax liabilities over the financial year due to the deductions counting as advanced payments toward their tax and National Insurance (NI).

For more information on CIS, take a look at our Construction Industry Scheme page.

Do I need to register for CIS?

Both contractors and subcontractors are affected by CIS, with each having different responsibilities.

A contractor:

• pays subcontractors for construction work.

A subcontractor:

• Carries out construction work for a contractor.

An umbrella company contractor is considered a subcontractor.

A contractor is required to register for the scheme, whereas a subcontractor doesn’t have to register, but in not doing so, deductions are still taken from their payments, but at a higher rate.

As an umbrella company doesn’t have any involvement with the CIS process, the umbrella contractor will need to register for the scheme themselves.

With Contractor Umbrella, once you’ve completed our sign-up form, you’ll need to provide your CIS reference number; if you’ve not yet registered then we will send you a link taking you to the HMRC website where you can do so.

It’s worth noting that there will be certain situations where a self-employed CIS worker may have to contract through an umbrella company due to the type of assignment and work they carry out, for example, if they are affected by SDC (Supervision, Direction or Control) rules.

We hope you have found this page useful. If you have any further questions on CIS or anything else, our team of experts are available to answer any queries, so give us a call on 01206 591 000 or email jaime.thorpe@contractorumbrella.com.