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CIS subcontractors and the CITB levy

The Construction Industry Scheme (CIS) is run by HM Revenue and Customs (HMRC).

Under the scheme, contractors deduct money from subcontractors' payments and pass it to HMRC.  HMRC tells contractors the deduction rates.

CIS tax rates

You can find the CIS tax rates on GOV.UK . Currently, most subcontractors are taxed at a rate of 20%. Subcontractors who are unregistered are taxed at 30%.

How CIS affects the CITB levy

The CITB levy is calculated on payments to:

  • Employees paid through the payroll, which for 2020, 2021 & 2022 will include furlough payments made under the HMRC Coronavirus Job Retention Scheme (CJRS), and where applicable any top up payments made to employees.
  • CIS subcontractors from whom you make CIS deductions (or 'pay net'). These include labour-only and supply and fit subcontractors.

Subcontractors can apply to HMRC for 'gross payment status ' where you pay them without a deduction. The CITB levy is not applied to CIS subcontractors who you pay gross.

On your Levy Return, you need to include the amount of CIS deductions you made from your subcontractors’ payments.

See the current levy rates

You may need to ask the person in your business responsible for making payments to subcontractors for a list of those you have made CIS deductions from.

For more information about CIS, visit GOV.UK