CIS and tax for overseas Construction firms operating in the UK

If your business is dealing with or developing land in the United Kingdom, the following points will apply: 

• Your profits will be taxed in the UK. 
• The Construction Industry Scheme (CIS) rules will apply.  

These rules apply to construction work done in the UK and apply to you whether you live in the UK or abroad, as the taxation is based on UK source income. 

Therefore, an overseas business that acts as a contractor or subcontractor must register: 

• To pay tax in the UK as a company or individual. 
• For the Construction Industry Scheme (CIS). 

How to register for CIS 

CIS registration will depend on whether you are self-employed (sole trader), a partnership or a company. 

1. Register as a non-resident sole trader or partnership for the Construction Industry Scheme

Limited liability partnerships and sole traders must register as contractors or subcontractors. After registration, they must follow the same CIS rules as UK-based contractors and subcontractors. 

2. Register as a non-resident company for the Construction Industry Scheme 

Non-UK resident companies must register for CIS before beginning work. Your registration process will depend on if you are a contractor or subcontractor. 

a) Contractor

To register as a contractor, follow the following steps: 

• Fill in section 1 of the CIS registration form. 
• Get an original tax clearance certificate from the tax authorities of your company’s home country. 
• If you have an agent working with you, complete form 64-8. 

 b) Subcontractor

To register for CIS as a subcontractor, follow the following steps: 

• Fill in section 2 of the CIS registration form. 
• Fill out the form CIS305. 
• Get an original tax clearance certificate from the tax authorities of your company’s home country. 
• If you have an agent working for you - you must complete form 64-8. 

After you are done, depending on whether you are a contractor or subcontractor, send the applicable information to: 

CIS Registrations 

Business, Tax and Customs (BT&C). 

HM Revenue and Customs 

BX9 1 AU 

Telephone: 0300 

Note: It is worth bearing in mind that the registration process may take up to 6 weeks. It's better to start earlier if you are in a hurry to start your construction work in the UK. 

How to register for tax 

Because your profits will be taxed in the UK, you must register for a tax deduction. Tax registration will depend on if you are an individual, sole trader, partnership or company. 

1. Individuals, sole traders and partnerships

Individuals, sole traders, and partnerships must register for Self-Assessment when dealing or developing land in the UK. Self-assessment is how some taxpayers submit a tax return in the UK yearly. They declare their income and capital gains in the tax return – and can also reclaim allowances and reliefs. 

2. Limited companies

In the UK, companies pay corporation tax on their profits and gains from selling assets (such as land, property, or shares) that have increased in value. Corporation tax is calculated on your annual profits – just like self-assessment.  

Non-UK resident companies can register for corporation tax in the UK by writing to HMRC and include your: 

• Company’s registered office address. 
• The date your annual accounts are made up to 
• The date you started a business dealing in or developing UK land – determines your company’s first accounting period start date. 
• Company’s country of tax residence 
• Country of incorporation and date of incorporation 

You should address your letter to: 

Corporation Tax services 

HM Revenue and Customs 

BX9 1AX 

United Kingdom 

Note: it is not mandatory to register with Companies House to register for Corporation Tax. 

How to claim a tax refund 

How you reclaim your tax refund will depend on if you are a sole trader, partnership or company. 

1. Sole trader and partnerships

To get a refund, when sending in your Self Assessment tax return, you should record: 

• Full amounts on your invoices as income 

• If you are a subcontractor – show any deductions contractors have made in the ‘CIS deductions’ field. 

After you send in your tax return, HMRC will work out your tax and National Insurance bill and take off any deductions. HMRC will pay your money back if you’re due a tax refund. However, if after deductions you still owe tax, you must pay it by 31 January following the end of the tax year. 

2. Non-resident limited companies

You should send your payment deduction statements to HMRC if you want to claim a refund of CIS tax. It should have: 

• Your name, address, and Unique Taxpayer Reference (UTR) 
• Full name and address of the contractor. You may also include their tax reference - if you know it. 
• Gross amount of the payment made to you. 
• Dates of the payments or the tax months when the contractor paid you. 
• The cost of any materials that have reduced the amount against which the deduction has been applied and the amount of the deduction 

You should mark your claim ‘CIS’ and address it to: 

CIS Registrations 

Business, Tax and Customs (BT&C). 

HM Revenue and Customs 

BX9 1 AU 

Contact CIS and contractor accountants in the UK 

For further guidance on Nonresident CIS and tax, contact us. We are the UK -leading contractor accountants – we can help you with all your CIS compliance, accounting, and bookkeeping tasks. Reach out to us via: 

• Call: 02033 259 341 
• Email: info@spondoo.co.uk  
• WhatsApp: +447395534661