The Construction Industry Scheme (CIS) was introduced by HMRC in regard to contractors and subcontractors. This scheme allows contractors to take a small amount from their subcontractor’s wages and pay it to HMRC. This amount is then put towards the subcontractor’s national insurance and income tax.  You’re required to register with the CIS if you pay subcontractors to do construction work or if you’ve spent upwards of £3 million on construction within a year since your initial payment was made.  The CIS tax amount is dependent on the subcontractor’s registration status. Therefore, you’re required to deduct 20% from the pay of registered subcontractors, 30% from unregistered subcontractors, and 0% if the subcontractor has gross payment status.