You take the credit, we process the debit

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Under the Construction Industry Scheme (CIS), contractors deduct money from asubcontractors’ payments and pass it to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the subcontractors’ tax and National Insurance.

Contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at a higher rate if they are not registered.