Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it on to HM Revenue and Customs (HMRC).
These deductions count as an advance payment towards the subcontractor’s Tax and National Insurance contributions.
Contractors must deduct this amount from their Subcontractors. If you are a Subcontractor and registered as self-employed or have a UTR number, you will be deducted 20% from your gross income.
If you are not registered as self-employed or have not applied for a UTR number then you will be taxed at the higher rate, which is 30%.