Course description

The Construction Industry Scheme, or CIS, decides how contractors in UK construction pay their subcontractors and how tax is taken from those payments. This course explains it in plain English, step by step, from both sides: the subcontractor who has deductions taken, the contractor who must verify, deduct, report and pay, and the bookkeeper who keeps it all running each month.

You begin with how money moves through the scheme and who counts as a contractor or a subcontractor. Then you learn what work is inside CIS, how to register and verify, how to work out a deduction, what goes on invoices and payment and deduction statements, and how to file the monthly return and pay HMRC on time. Later sections cover gross payment status, the VAT domestic reverse charge in outline, getting deductions back at the year end, records, employment status and the mistakes that bring penalties.

There are 10 sections and 50 written lessons. Each lesson has a worked example, common slips, questions people often ask and a short exercise to try, and each section ends with a short quiz. You follow Kelda, a made-up bookkeeper in Plymouth, as she runs CIS for a small building firm and helps its subcontractors, slips included. In the final lessons you work through a project for a made-up loft conversion business in Shrewsbury, with full worked answers. Every section has a practice pack with exercise sheets, answer keys, cheat sheets and scenario sets, plus a glossary, drawings of how the scheme works, a scope scenario set, a verification log and deduction calculator spreadsheet, a calculation worksheet with answers, invoice and statement templates, a monthly return checklist, a gross payment status checklist, a record keeping template, a deadline calendar and official rules reference sheets.

What you'll learn

• How the Construction Industry Scheme works: contractors, deemed contractors and subcontractors, the three deduction rates, deductions as advance payments of tax, and where CIS fits with the rest of your tax.
• What work is in and out of CIS: construction operations, the main exclusions, mixed contracts and finishing work, exemptions, and the special cases from public bodies to businesses based abroad.
• Registering for CIS: registering as a subcontractor and as a contractor, sole traders, partnerships and limited companies, reporting changes, and the online service and helpline.
• Verifying subcontractors: when to verify, the details you need, what HMRC's result means, fixing a mismatch and keeping a verification log.
• Working out the deduction: the gross amount, materials and the part you deduct from, what counts as materials, worked examples at each rate, and evidence for materials.
• Invoices and payment and deduction statements: what an invoice shows, what a statement must include, advances and corrections, checking statements, and a simple filing system.
• The monthly return, paying HMRC and penalties: tax months, the declarations, nil returns and inactivity, paying monthly or quarterly, penalties, appeals and corrections.
• Gross payment status and VAT: what being paid gross means, the qualifying conditions, applying and the annual review, and the VAT domestic reverse charge in outline.
• Getting deductions back, records and employment status: reclaiming through Self Assessment, set-off through payroll for companies, record keeping, employment status in outline and common mistakes.
• Your monthly CIS routine and final project: a monthly routine, a deadline calendar for the year, and a final project for a made-up contractor and subcontractor, with worked answers.

Who it's for

Self-employed builders and trades working as subcontractors, small contractors who pay subcontractors, and bookkeepers who run CIS for clients, across the UK. No knowledge of CIS is needed, and a calculator and paper are enough. The practice spreadsheets are optional and open in any spreadsheet app.

What this course is, and isn't

This is education, not advice. It explains how the scheme works and what the official guidance says, but it can't look at your own situation. For that, it signposts GOV.UK's CIS guides, HMRC's CIS 340 guide, the CIS helpline and a qualified accountant or tax adviser. Rules, rates and dates come from GOV.UK and HMRC's CIS 340 guide read on 3 November 2026; they can change, so check before you rely on a detail. It names no software, banks or apps. Every example figure is made up and labelled, and every person and business in the course is fictional.

What will I learn?

• Explain how money and paperwork move through CIS between subcontractors, contractors and HMRC
• Decide whether a job or payment is inside CIS, using the exclusions and special cases in HMRC's guidance
• Register for CIS as a subcontractor or contractor and know which changes to report
• Verify subcontractors, act on HMRC's result and keep a verification log
• Work out CIS deductions at 20%, 30% and gross, taking off materials and other allowed costs
• Prepare clear invoices and payment and deduction statements with every item HMRC lists
• File monthly returns and nil returns on time, pay HMRC by the right date and avoid penalties
• Describe the qualifying conditions for gross payment status and how the VAT reverse charge works in outline
• Reclaim CIS deductions through Self Assessment or set them off through payroll as a company
• Run a monthly CIS routine and a yearly deadline calendar for yourself or a client

Frequently asked questions