Construction Industry Scheme (CIS)
Clearpath Umbrella
What is the Construction Industry Scheme (CIS)?
Contractors working within the construction industry must register with the government-run Construction Industry Scheme (CIS). Under this scheme, contractors are required to deduct tax from subcontractor payments, which is then passed on to HM Revenue and Customs (HMRC). Subcontractors who are not registered with the CIS will have higher deductions taken from their payments. Once contractors are registered under the government’s CIS scheme, Clearpath Umbrella takes care of everything. We ensure all necessary tax deductions under the CIS scheme are made and paid directly to HMRC on your behalf.
It’s important to note that not everyone working in the construction industry is self-employed. Regardless of your role, you should assess your employment status just as you would in any other industry. Please be aware that even though Clearpath Umbrella processes your pay and provides you with a pay statement, you are not considered a Clearpath Umbrella employee and therefore will not be entitled to the associated employment rights.
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Do all workers in the construction industry automatically pay tax under the CIS?
You should only pay tax under the Construction Industry Scheme (CIS) if you are genuinely self-employed. Contractors are responsible for determining whether their workers are employed or self-employed. While many contractors may prefer hiring on a self-employed basis—due to reduced costs, fewer responsibilities, and less paperwork—self-employment is a legal status, not a choice. Even if the engagement is short-term, the worker has a Unique Taxpayer Reference (UTR), or they provide some of their own tools, it does not automatically qualify them as self-employed. For example, if a worker operates exclusively for one contractor and is under their direction, they are likely to be classed as employed. In such cases, Income Tax and National Insurance Contributions (NICs) must be deducted at source through PAYE (Pay As You Earn), not under the CIS.
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You should only pay tax under the Construction Industry Scheme (CIS) if you are self-employed and working as a subcontractor in the construction industry.
Your employment status depends on how and for whom you work—not just your preference. If you work exclusively for one contractor, follow their instructions, and are under their control, you're likely to be classed as an employee, even if the work is short-term.
Not necessarily. While having a Unique Taxpayer Reference (UTR) and using your own tools are factors, HMRC looks at the overall working relationship. If you're controlled by the contractor, don't take on financial risk, and work solely for one business, you're likely to be seen as an employee.