The Construction Industry Scheme affects how contractors pay registered subcontractors. Getting the basics right protects cash flow, reduces corrections and helps both parties understand exactly what has been deducted.

Verify subcontractors before paying them

Before the first payment, contractors should verify each subcontractor with HMRC. The verification result confirms whether deductions should be made at 20%, 30%, or paid gross.

Keep the verification details with your payroll records so future payments use the correct status.

Calculate deductions accurately

CIS deductions normally apply to the labour element of an invoice. Qualifying materials and certain direct costs may be excluded when they are properly evidenced.
Provide a clear payment and deduction statement after every payment so the subcontractor can reconcile their records.

Submit returns and keep reliable records

Monthly CIS returns must reflect payments made in the reporting period. Consistent records, prompt corrections and specialist payroll support make deadlines much easier to manage.