How do you register as a subcontractor? We explain the process for all business types including Companies, Partnerships and Soletraders.
Subcontractor registration is voluntary. Businesses pay a lower CIS tax rate if they register, therefore registration is advised.
We will explain who is a subcontractor, when they should register and how to register based on the business type.
A business becomes a subcontractor when they carry out construction work for a contractor.
Contractors are other businesses in the construction industry. The two requirements which define a contractor are stated in our when to register as a contractor blog. If there is no contractor, then there is also no subcontractor.
Businesses that regularly carry out work for contractors should register for CIS.
It is important to note that private households aren’t businesses and therefore they aren’t contractors. Any work done requested directly by a private home owner does not fall within CIS.
As an example the fitting of solar panels is a type of construction covered by CIS.
When a homeowner requests the installation, there is no contractor. In this case there would be no CIS deductions. As a result, any business, which predominantly works directly for the homeowner does not need to register.
Let us say that the home owner uses a builder and it is the builder that requests for solar panels to be installed on the very same home. In this example, there is a contactor and as a result CIS deductions would apply. Businesses, which predominantly carry out work for contractors should register as a subcontractor.
Registering as a subcontractor is voluntary. However as the CIS tax rate deduction is lower we recommend that businesses do register.
Businesses can register as a subcontractor as follows:
Individuals need to apply using form CIS 301
Partnerships need to apply using form CIS 304
Limited companies apply using form CIS 305
Tip: If you already have a government gateway ID which you use to log on to other HMRC services you can go to add services on there and it will allow you to apply as a subcontractor.
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