What is a CIS Card?

A CIS card is given to self employed individuals who have registered for the construction industry scheme.

Understanding your CIS card is crucial for anyone working as a subcontractor in the construction industry.

The Construction Industry Scheme (CIS) is HMRC’s system for handling tax and national insurance contributions for construction workers, and your CIS card proves you’re properly registered.

This small but powerful document can make a significant difference to your take-home pay and annual tax refund.

Construction workers with CIS cards benefit from lower tax deduction rates and often discover they’re owed substantial refunds when completing their self-assessment tax returns.

If you don’t have a CIS card you may not be able work for the contractor because work is sometimes only permitted when a CIS card is held.

Without a CIS card tax will be deducted by your contractor at a rate of 30% instead of the normal 20%.

How do I apply for a CIS card?

Before beginning the registration process, you must ensure you meet the basic eligibility criteria.

You need to be genuinely self-employed or operating through your own limited company, working primarily in the UK construction industry.

This includes traditional building work, civil engineering, installation of systems in buildings, and related activities like scaffolding and site preparation.

You can apply for CIS registration online through the HMRC website.

The process depends on your current tax status:

• If you’re already registered as self-employed, you can apply online using your existing Government Gateway account.
• New applicants who aren’t yet registered for self-employment will need to complete additional steps, including registering for self-assessment.

You can find the best way to apply for a CIS card via .GOV.

The online application typically takes a few working days to process, after which you’ll receive confirmation of your CIS registration.

While you wait for your physical card, you can provide your CIS number to contractors to ensure you pay the correct tax rate.

What happens after I have registered for my CIS card?

The verification process begins once HMRC receives your application. They will check your details against their records and may request additional information if needed.

Once registered, you’ll receive a CIS registration number that you must provide to all contractors before starting work.

HMRC uses your self assessment unique tax reference number as your CIS number. A UTR number is a 10 digit number issued by HMRC when you register for self assessment.

How do I prove my CIS registration to contractors?

You don’t necessarily need to carry a physical card – your registration number is sufficient proof.

Contractors will verify your registration status directly with HMRC before making payments, so it’s crucial that your details are up to date.

If you change address or other personal details, you must inform HMRC promptly to avoid verification issues.

Some contractors may ask for additional documentation, but your CIS number should be sufficient for most purposes.

Keep a record of your registration number and ensure all contractors have the correct information.

Do I need to complete a tax return if I have a CIS card?

Yes, having a CIS card means you’re required to complete an annual self-assessment tax return.

This is mandatory for all CIS registered subcontractors, regardless of your earnings level.

Your tax return is where you’ll claim back any overpaid tax and declare all your construction income and allowable business expenses.

The deadline for online submissions is January 31st following the end of the tax year, and late submissions can result in penalties.

Completing your tax return is also your opportunity to claim legitimate business expenses and potentially receive a substantial tax refund, making it well worth the effort.

What happens if I work without a CIS card?

Working in construction without CIS registration means contractors must deduct tax at the higher rate of 30% from your payments, significantly reducing your take-home pay.

This higher deduction rate is designed to encourage proper registration with the scheme.

Additionally, you’ll still need to complete a self-assessment tax return to declare your construction income, and you may face penalties for not registering when required.

The good news is that any overpaid tax due to the higher deduction rate can be claimed back through your tax return.

In general it’s better to register properly from the start and avoid the cash flow issues caused by excessive deductions.

CIS Subcontractor Tax Frequently Answered Questions

Will I pay 30% tax during my application period? During this period, contractors should continue deducting tax at the higher 30% rate until your registration is confirmed.

Once approved, HMRC will send you a CIS registration certificate containing your verification number, which contractors need to verify your status and apply the reduced 20% deduction rate.

Understanding the timeline is crucial for planning your finances. New businesses should register as soon as they start trading, while existing unregistered subcontractors can apply at any time.

The reduced deduction rate only applies from the date your registration is approved, not retrospectively.

This means earlier registration translates directly into more money in your pocket sooner.

What’s the difference between a CIS card and a CSCS card?
A CIS card and CSCS card serve completely different purposes in the construction industry.

Your CIS card is a tax document that proves you’re registered with HMRC’s Construction Industry Scheme and allows you to pay the lower 20% tax rate instead of 30%.

A CSCS card, on the other hand, is a health and safety qualification card that proves you have the training and competence to work safely on construction sites.

You need both cards for different reasons – the CIS card for tax purposes and the CSCS card for site access and safety compliance.

Having both ensures you’re legally compliant and can work efficiently across different construction projects.

Can foreign workers get a CIS card?
Yes, foreign workers can register for the Construction Industry Scheme, but the requirements vary depending on your residency status and visa type.

EU nationals and those with settled status can typically register in the same way as UK residents. Workers on certain visa types may also be eligible, but you’ll need to provide additional documentation proving your right to work in the UK.

Non-resident workers face different rules and may be subject to different tax rates.

If you’re unsure about your eligibility, it’s worth seeking professional or HMRC advice to ensure you’re complying with both immigration and tax requirements while maximising your take-home pay.

What should I do if my CIS deductions seem wrong?
If you believe contractors are deducting the wrong amount of tax, first check that they have your correct CIS registration number and that your HMRC records are up to date.

Contractors should be deducting 20% if you’re properly registered, or 30% if there are verification issues.

Contact the contractor immediately if you notice discrepancies, as they may need to correct their records.

You should also check your monthly CIS statements from contractors and compare them with your own records. If problems persist, contact HMRC’s CIS helpline for assistance.

Remember, any overpaid tax can be claimed back through your annual tax return, but it’s better to resolve issues promptly to maintain proper cash flow.