What is CIS and does my small building business need to register?

The Construction Industry Scheme (CIS) requires most contractors in the construction sector to register with HMRC and deduct money from payments to subcontractors, passing it on as an advance towards the subcontractor's tax and National Insurance. If you pay subcontractors for construction work (even occasionally, as part of a wider business), you likely count as a contractor and must register for CIS before making your first payment. Subcontractors should also register, as unregistered subcontractors have a higher deduction taken from their pay — an accountant can confirm which side of CIS your business sits on, since some firms are both.