If you are setting up as a self-employed tiler, you will almost certainly come across the Construction Industry Scheme at some point. For some tilers it is relevant from day one. For others, it never applies at all.

Let’s break down the basics:

What Is the CIS Scheme?

The Construction Industry Scheme (CIS) is a tax arrangement run by HMRC. It applies when a contractor pays a subcontractor for construction work. Under CIS, the contractor is required to deduct a percentage from the subcontractor's payment and hand it directly to HMRC, rather than paying the full amount to the subcontractor.

The idea behind it is to reduce the amount of unpaid tax in the construction industry. HMRC treats the deductions as advance payments towards the subcontractor's tax and National Insurance bill.

Does CIS Apply to Tilers?

It can do, yes. Tiling is classed as construction work under the scheme, so if you are working as a subcontractor for a contractor, CIS may apply to those payments.

The key question is who you are working for. If you are tiling directly for homeowners, CIS almost certainly does not apply. Private homeowners are not contractors under the scheme, so those jobs fall outside it entirely.

If you are working as a subcontractor for a building company, a developer, a main contractor or another tradesperson who is acting as a contractor, that is where CIS kicks in. In those situations, the contractor is likely required to deduct CIS from your payments.

For many self-employed tilers who work predominantly in the private domestic market, taking on jobs for homeowners and building a reputation through word of mouth, CIS may not come into the picture very often. But as your business grows and you start taking on work from builders or developers, it is worth understanding how it works.

How Much Gets Deducted?

The deduction rate depends on whether you are registered with CIS.

If you are registered as a CIS subcontractor, the contractor will deduct 20% from the labour portion of your payment. If you are not registered, the deduction goes up to 30%. Registering is straightforward and free, so there is no good reason not to if you are regularly doing work that falls under the scheme.

It is worth noting that deductions only apply to your labour costs, not to the cost of materials. If you supply both labour and materials on a job, the contractor should only be deducting from the labour element.

How Do You Register for CIS?

You can register as a CIS subcontractor through the HMRC website. You will need your Unique Taxpayer Reference (UTR) number, which you get when you register as self-employed. The process is done online and does not take long.

If you have not yet registered as self-employed, that comes first. 

Can You Get the Money Back?

Yes. The deductions are not a final tax bill, they are payments on account. When you complete your Self Assessment tax return at the end of the year, any CIS deductions you have made are credited against what you owe. If more has been deducted than you actually owe in tax, HMRC will refund the difference.

For example, if you have had £4,000 deducted through CIS over the course of the year but your actual tax bill comes to £2,500, you would receive a refund of £1,500. The money is not lost, it is just held by HMRC until your return is processed.

This is one reason why keeping good records throughout the year matters. You need to be able to account for all CIS deductions made and match them against your earnings.

What Is Gross Payment Status?

If your business grows to a certain size, you can apply for Gross Payment Status (GPS). This means contractors pay you in full without making any CIS deductions, and you manage your own tax payments directly to HMRC.

To qualify, you need to meet three conditions: you must be running a legitimate UK construction business with a bank account, your net construction turnover needs to be at least £30,000 per year as a sole trader, and you must have a clean compliance record with HMRC over the previous 12 months.

GPS is worth aiming for once your business reaches that point, as it improves your cash flow considerably.

A Quick Summary

• CIS applies when you work as a subcontractor for a contractor on construction work
• Tiling counts as construction work under the scheme
• If you work directly for homeowners, CIS generally does not apply
• Register with CIS to have 20% deducted rather than 30%
• Deductions are taken from labour costs only, not materials
• Any excess deductions are refunded through your Self Assessment return

Getting Started the Right Way

Understanding how the tax side of a tiling business works is part of what makes the difference between a business that runs smoothly and one that creates headaches. At Expert Tiling Courses UK, our courses cover not just the practical skills of tiling but also the business knowledge you need to run a successful operation from day one.

If you are thinking about making tiling your career, take a look at the courses we offer or get in touch if you have any questions.

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