Should I Be Deducting Cis?

If you are a registered subcontractor and approved for gross payment status, then no deductions should be made under the CIS. Any amounts withheld by the contractor will be paid to HMRC as advance payments towards your individual income tax and National Insurance contributions (NIC) bill for the relevant tax year.

Do I need to deduct CIS?

Contractors registered under the Construction Industry Scheme (CIS) are required to deduct the following tax from their payments to subcontractors: 20% deduction (if the subcontractor is registered for CIS); or. 30% deduction (if the subcontractor isn't registered for CIS).

What happens if I don't deduct CIS?

If a contractor fails to submit the monthly CIS return on time, penalties of £100 are levied even if the return is one day late. If the return is two months late, the penalty is £200. If six or 12 months late, a penalty of £300 or 5% of the CIS deductions (whichever is higher) is applied at each interval.