Not every job you do falls under CIS. But the exemptions are narrow, specific, and often misunderstood.
Working out which jobs don’t come under CIS can feel like wading through treacle. You’re juggling quotes, managing sites and dealing with the standard chaos of running a construction business. The last thing you need is confusion about whether CIS applies to a particular job or worker.
So let’s break down exactly who and what is exempt.
The Basics: What CIS Actually Covers
The Construction Industry Scheme applies to payments from contractors to subcontractors for construction work in the UK. Construction work technically includes building, repairs, alterations, demolition, site preparation, installation of heating systems and decorating. Basically all the core activities covered by the building trades.
When CIS applies, contractors must verify subcontractors with HMRC and file monthly returns after deducting tax at the appropriate rate: 20% for registered subbies or 30% for unregistered. It’s a pain in the arse, so knowing when it doesn’t apply can spare you a lot of grief.
Who Doesn’t Need to Register for CIS
Exemptions apply to two groups: contractors and subcontractors.
Contractors who don’t need to register:
Businesses spending less than £3 million on construction in any 12-month period are “de minimis contractors” and don’t need to register. This catches most businesses that occasionally commission construction work but aren’t in the construction industry themselves. But once you cross that £3 million threshold, though, you’re deemed contractor and must register within 30 days.
Subcontractors who don’t need to register:
Employees don’t register for CIS because they’re paid through PAYE, not as subcontractors. This might sound obvious, but the distinction matters. If someone’s genuinely employed, CIS is irrelevant.
Those doing work entirely outside the UK are also exempt, as CIS only applies to construction work carried out in the UK.
Types of Work Exempt From CIS
Even when both parties are registered, certain types of work don’t fall under CIS.
Small works exemption applies when a subcontractor does work on their own property worth less than £1,000 (excluding materials). But you’ll need to call the CIS helpline on 0300 200 3210 to get this exemption confirmed by HMRC as it’s not automatic.
Deemed contractor exemptions cover work on property used for your own business (not for sale or rent), and small contracts under £1,000 (excluding materials) which also require CIS helpline approval.
Work that’s not construction is where things get interesting. Not everything that happens on a building site counts as construction operations. Architects and surveyors provide professional services, not construction work. Carpet fitting doesn’t fall under CIS unless it’s part of broader construction work. Scaffolding hire — just hiring, not erecting, it — is outside CIS. Manufacturing and delivering materials isn’t construction unless you’re also installing them.
Site facilities like catering, security and medical services are also exempt. If you’re running the canteen on a building site, you’re not involved in construction work.
Finally, there’s an exemption for educational and charitable work paid for by a governing body or head teacher of a maintained school on behalf of a local education authority.
Why CIS Exemptions Don’t Fix Employment Status Issues
Here’s what catches people out: being exempt from CIS doesn’t mean employment status doesn’t matter.
Some contractors think that if work falls outside CIS, they don’t need to worry about whether someone’s genuinely self-employed. Wrong. HMRC can still investigate employment status regardless of whether CIS applies. The two issues are separate.
CIS is about tax collection on construction work. Employment status is about whether someone should be taxed as an employee or self-employed. Just because you’re not operating CIS doesn’t mean you’re safe from employment status challenges.
If you’re working with the same people regularly, paying them for their services and controlling how they work, HMRC might argue they’re employees whether CIS applies or not. That’s when you need proper contracts that document genuine self-employment relationships.
Get It Right From the Start
So CIS exemptions are narrow and specific. Most construction work and most workers fall under the scheme. But remember: CIS is just one piece of the compliance puzzle. Even if work is exempt from CIS, you still need to get employment status right. That means proper contracts, clear working arrangements, and documentation that stands up to scrutiny.
Need help navigating CIS and employment status? HardHats specialise in helping construction businesses work with subcontractors long-term without all the compliance headaches. Get in touch so we can start helping you.