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CIS for Overseas Contractors

If your business is based outside the UK and you’re managing a construction, installation, or civil engineering project in the UK that involves subcontractors, the Construction Industry Scheme (CIS) applies to you. Many overseas businesses only discover their obligations after the project has started—when it’s much harder (and more expensive) to fix mistakes.

At Türner & Co, we support international firms—finance leaders, project managers, and procurement teams—to set up and manage CIS compliance properly. We help you protect cash flow, avoid penalties, and ensure that your subcontractors are paid correctly and on time.

Get in touch
+44 (0) 1636 526 075

What is the Construction Industry Scheme (CIS)?

The CIS is a UK tax regime designed to tackle tax evasion in the construction sector. If you are classed as a CIS Contractor, you must:

  • Register with HMRC
  • Verify your subcontractors’ status
  • Deduct tax from payments where required
  • Submit monthly CIS returns

 
This applies whether you’re a UK or overseas company. If your business is paying others to carry out construction work physically in the UK, CIS obligations apply.

Who Needs to Register as a CIS Contractor?

You will likely need to register if:

  • You are an overseas business carrying out construction-related activities in the UK.
  • You are engaging subcontractors to deliver any part of the project on UK soil.

 
Important: Even if you also perform some of the work yourself (as a subcontractor), you must register as both a contractor and a subcontractor.

Why CIS Compliance Matters

Failing to operate CIS correctly is a common—and costly—mistake.

Many businesses pay subcontractor invoices gross when deductions were required. HMRC holds you as the Contractor responsible, and once a payment is made, it’s extremely difficult to recover the overpayment from the subcontractor.

Consequences of non-compliance include:

  • Financial penalties and interest
  • Cash flow disruption from unplanned tax liabilities
  • Loss of Gross Payment Status
  • Damaged relationships with subcontractors or HMRC

What Does a CIS Contractor Have to Do?

  • Register with HMRC as a CIS Contractor before making payments to subcontractors
  • Verify each subcontractor with HMRC before payment – this determines whether a deduction is needed, and at what rate (0%, 20% or 30%)
  • Operate PAYE for workers who are employees, not subcontractors – we help assess worker status and UK payroll obligations. Read more about tax obligations for employees in the UK →
  • Deduct CIS tax from the labour portion of the subcontractor invoice (if required)
  • Submit a monthly CIS return to HMRC by the 19th of the following month, showing all payments made and deductions taken
  • Issue payment and deduction statements to your subcontractors each month
  • Keep records for at least 3 years – including contracts, invoices, verifications and CIS returns
  • Consider your VAT obligations – special VAT rules apply to construction services in the UK.
    Read more about the Domestic Reverse Charge for Construction →

Our CIS Services for Overseas Contractors

  • CIS Contractor registration and HMRC liaison
  • Verification of subcontractors (including other overseas firms)
  • Drafting contracts and purchase order terms that reflect CIS obligations
  • Monthly CIS return preparation and submission
  • Advice on correcting historic non-compliance and bringing your records up to date
  • Tailored onboarding for your procurement and finance teams

A Note for Procurement and Finance Teams

Your project success depends on getting this right. The biggest risks come when invoices are paid incorrectly. Once you’ve paid a subcontractor in full when tax should have been withheld, the liability sits with you.

We help your in-house teams understand what to check, what to ask, and how to communicate clearly with your subcontractors.

FAQs

Yes. Late registration may result in penalties and backdated deductions. We can help bring you up to date.
Typically 6–8 weeks for companies. It may take longer for partnerships or sole traders.
You may be required to deduct 30% from payments, and face penalties if this was not applied correctly.
Yes. CIS applies to anyone physically carrying out construction activities in the UK, regardless of where they are based.

Many international businesses act in both roles. You’ll need to meet the obligations of both a CIS contractor (deducting and reporting tax) and subcontractor (ensuring deductions are correct or applying for GPS).
Most likely yes. Installation work often falls within the scope of CIS – we can review your scope of work to confirm.

Contact Our Experts

Start your UK project the right way. Let Türner & Co handle your CIS compliance so you can focus on delivery.

Kate McDermott

Director

Head of Indirect Tax & HR

kate.mcdermott@tuerner.com
+44 (0) 1636 526 075

Nathan Widdowson

Assistant Manager

VAT & CIS

nathan.widdowson@tuerner.com
+44 (0) 1636 526 075

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