Most builders using subbies know CIS exists. Most don't know exactly what they're supposed to do about it — or that there's now a way to make the whole thing disappear.
What CIS is
The Construction Industry Scheme (CIS) requires contractors to withhold tax from payments made to self-employed subcontractors for construction work. The deduction rate depends on the trade's status with HMRC: 0% for gross status, 20% for net-registered, 30% for unregistered. The withheld amount gets paid to HMRC monthly and counts as an advance payment against the trade's tax bill.
The obligation sits with whoever makes the payment to the subcontractor. That's the part most builders get wrong.
Who the CIS contractor actually is
Under HMRC's rules, the contractor is the entity that pays the subcontractor — not necessarily the one who commissioned the job. This matters because of how Cabin works.
When you book a trade through Cabin, the money flow is: you pay Cabin, Cabin pays the trade. Cabin is making the payment to the subcontractor. That makes Cabin the CIS contractor — not you. Your CIS obligation to that trade is fully extinguished the moment you pay Cabin. You don't verify, you don't deduct, you don't file a monthly return, you don't issue a deduction statement. None of it. Cabin handles everything.
What CIS looks like when you hire direct
If you're paying a trade yourself — bank transfer or otherwise — you're the contractor and the full obligation is yours:
- Before the first payment — verify the trade's CIS status with HMRC via their online portal. You can't take the trade's word for it. HMRC gives you a verification number and the correct deduction rate.
- After each payment — issue a deduction statement showing gross amount, deduction, and net paid.
- By the 19th of the following month — file a monthly CIS return and pay over the deductions. Miss it and there's a £100 penalty. Miss it twice and it's £200.
If the trade doesn't show up on HMRC's system, you deduct 30% — the unregistered rate. This catches a lot of builders out when a trade claims to be registered but isn't.
Not sure what to deduct? Use the Cabin CIS calculator — enter the day rate and CIS status and it shows you exactly what gets deducted and what the trade takes home.
Five mistakes builders make with CIS
- Not verifying before the first payment. Taking a trade's word for their CIS status isn't good enough. HMRC requires verification through their portal. If you get it wrong, you're liable for the shortfall.
- Deducting on materials. CIS applies to labour only. If a trade invoices you for labour and materials, deduct from the labour element only. Getting this wrong means over-deducting.
- Thinking a nil return isn't required. If you made no CIS payments in a given month, you still need to file a nil return.
- Not issuing deduction statements. The trade needs these to reclaim their CIS deductions on their self-assessment return. It's a legal requirement, not optional.
- Assuming gross status means skip the process. Gross status still needs verifying through HMRC. You just don't deduct — you don't skip verification entirely.
The simpler way
When you book through Cabin, none of the above applies to you. Cabin verifies CIS status, applies the correct deduction, holds the amounts, files the monthly returns, and issues deduction statements to trades. The builder's only job is to pay the booking.
Download Cabin — free on iOS and Android. Post a job, find a trade, GPS clock-in, CIS fully managed.