Who is exempt from cis scheme?

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You are entirely exempt from the Construction Industry Scheme (CIS) if your work falls outside HMRC’s definition of construction. This includes architects, surveyors, carpet fitters, people who deliver building materials, companies that manufacture building supplies, and businesses that hire out scaffolding without providing the labour to set it up. Additionally, if you are a homeowner having work done on your own private property, you are completely exempt from the scheme and do not need to register as a contractor.

What exactly is the CIS Scheme?

If you work in the UK construction industry, you’ve probably heard of CIS. The Construction Industry Scheme is a set of rules created by HMRC. Under this scheme, contractors deduct money from a subcontractor’s payments and hand it straight over to HMRC. These deductions count as advance payments towards the subcontractor’s tax and National Insurance bill.

It’s designed to keep tax affairs tidy in the building trades. But, as with all things tax-related, there is a lot of confusion around who actually needs to be part of it.

What work is exempt from CIS?

HMRC is very specific about what counts as “construction operations.” If you do the following types of work, you do not fall under the CIS rules:

• Architecture, surveying, and design: If you are planning or designing the building, rather than physically building it, you are exempt.
• Delivering materials: If your only job is driving the lorry to drop off bricks, cement, or timber, you aren’t covered by CIS.
• Carpet fitting: Laying carpets doesn’t count as construction under the scheme (though fitting wood floors usually does!).
• Manufacturing: Making the materials or components used in construction (like plant machinery or building supplies) is exempt.
• Scaffolding hire (without labour): If you simply rent out the metal poles and boards, you are exempt. However, if you also build the scaffolding on-site, you do fall under CIS.
• Non-construction site services: Running the site canteen, providing security, or running temporary offices doesn’t count.

What if I’m a homeowner?

Good news: if you are a private householder paying a builder, plumber, or decorator to do work on your own home, you are completely exempt. You do not have to register as a contractor or deduct tax from your builder’s pay. You just pay the invoice as normal.

(Speaking of trades, if you are working for yourself in a trade and wondering about getting professional help with your finances, you might find our guide on Does Painter and Decorator Need Accountant helpful!)

What if I am exempt from CIS?

If your work is exempt, you get paid your full invoice amount without any CIS deductions being taken off before it hits your bank account.

However, just because you are exempt from CIS doesn’t mean you are exempt from paying tax! You still need to report your earnings to HMRC.

If you are working for yourself, you will need to handle your own tax affairs. Here are a couple of helpful resources to make sure you stay on the right side of the taxman:

1. Know your deadlines: Make sure you read up on When to Register for Self Assessment: Don’t Miss the Deadline so you don’t get hit with any nasty late fees.
2. Keep your bills down: If you are paying your own tax, you want to make sure you aren’t paying more than you have to. Check out our breakdown of What self employed expenses can i claim to see what you can legally deduct from your tax bill.

Summary The easiest way to figure out if you are exempt from CIS is to ask yourself: Am I physically altering, building, repairing, or demolishing a structure? If the answer is no, there is a very good chance you are exempt. When in doubt, it is always best to check directly with HMRC or speak to a qualified accountant to make sure your business is compliant.

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