PM276000 | Construction Industry Scheme (CIS)

The scheme requires contractors to deduct tax from payments made to sub-contractors. However, sub-contractors can apply to HMRC to receive gross payments if certain tests are met - the ‘business test’, ‘turnover test’ and ‘compliance test’. Full guidance is available in the Construction Industry Scheme Reform (CISR) manual.

Where the sub-contractor is a partnership (including an LLP), form CIS304 should be completed. Special rules apply in relation to the turnover test; please refer to CISR44160 and CISR44170. In respect of the compliance test, all partners must meet the necessary conditions to be eligible, as per the instructions at CISR46030.

You may also need to be aware of special considerations arising when there is change in the type of concern, for example a sole trade to a partnership. There is guidance on this at CISR43200 onwards.