Most of the CIS guides you'll read online are written for sole traders. The registration process, the Self Assessment route, the refund calculation — it all assumes you're a self-employed individual filing a personal tax return. If you operate through a limited company, those guides don't fully apply to you.

Your company is subject to the same CIS deduction rates. Your contractors verify your company the same way. Your deduction statements look the same. But from the moment the money leaves your invoice and sits with HMRC, the process of getting it back is entirely different — and using the wrong route is one of the most common and costly mistakes directors make.

Sole Trader vs Limited Company — The Key Difference

The deduction rates are identical. The registration process is similar. But the reclaim route is completely different:

How to Register Your Limited Company for CIS

Your limited company registers for CIS separately from any personal registrations. Even if you're already registered as a sole trader subcontractor with your own UTR, your company needs its own CIS registration.

1. Log in to your HMRC business tax account via Government Gateway — use the company's Government Gateway credentials, not your personal ones.
2. Navigate to the Construction Industry Scheme section.
3. Register the company as a subcontractor using form CIS305 (online or postal).
4. You'll need: the company UTR, Companies House registration number, and National Insurance numbers for each director.
5. HMRC verifies the company — registration typically processes within a few working days online.
6. Give your contractor the company UTR and company name — they verify the company with HMRC before making payments.

How Your Company Reclaims CIS Deductions — The EPS Route

This is the process that most directors either don't know about or get wrong. Here's how it works:

Step 1: Collect Your Deduction Statements

Every contractor who pays your company must give you a CIS payment and deduction statement for every payment. These show the gross amount, the materials excluded from deduction, the CIS deduction, and the net payment. Your company needs these to support every EPS submission — HMRC cross-references them.

Step 2: Submit Your Monthly EPS

Each tax month, alongside your regular payroll submission, your company submits an Employer Payment Summary (EPS) to HMRC through your payroll software. On the EPS, you declare the total CIS deductions your company has suffered year-to-date (cumulative from 6 April, not just the current month).

The EPS reduces the amount your company pays to HMRC each month. Instead of paying the full PAYE and NIC liability, you pay the net amount after CIS deductions are offset. This is the cash flow benefit of doing the EPS correctly — you keep more money in the company every month instead of waiting for an annual refund.

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Step 3: Year-End Reconciliation

At the end of the tax year (5 April), if your company has unrecovered CIS deductions — because the total CIS suffered exceeded total PAYE and NIC liabilities for the year — the surplus is carried into the Corporation Tax return (CT600). On the CT600, you declare the remaining unrecovered CIS deductions, which offset against your Corporation Tax bill.

The PAYE Scheme Requirement — Why It Matters

To submit an EPS, your company needs to be registered for PAYE with HMRC. This is a legal requirement for companies with employees — but it also applies to companies that want to use the EPS route to reclaim CIS deductions.

A limited company director who pays themselves only through dividends (with no salary, no employees, no PAYE scheme) technically has no EPS to submit — and therefore no monthly reclaim route. The CIS deductions sit on the PAYE account without being offset, and the only route left is the CT600 at year end.

In practice, most construction company directors pay themselves a small salary (typically around the National Insurance lower earnings limit — £6,500 in 2026/27) specifically to maintain a PAYE scheme and enable the monthly EPS offset. The salary is minimal, the PAYE liability is minimal, but the EPS mechanism becomes available — allowing monthly CIS offsets that significantly improve cash flow.

Gross Payment Status for Limited Companies

Limited companies can apply for gross payment status (0% CIS deduction) on the same basis as sole traders. To qualify, the company must pass three HMRC tests:

The compliance test is more demanding for limited companies because it covers Corporation Tax, PAYE, and VAT — not just income tax. A single late VAT return can fail the application. HMRC reviews GPS annually, so maintaining compliance is ongoing, not a one-time requirement.

When You Also Pay Subcontractors — Acting as Contractor and Subcontractor

Many limited companies in construction are both subcontractors (receiving CIS deductions on their income) and contractors (deducting CIS from payments they make to their own subcontractors). This creates a two-sided position:

• On the income side: CIS deducted from your invoices by main contractors — reclaimed via EPS
• On the payments side: CIS you deduct from your subcontractors' invoices — reported on your monthly CIS return and paid to HMRC
• The difference between what you suffer and what you collect can be netted through the PAYE system, keeping the monthly payments to HMRC accurate

Records Your Company Must Keep

• CIS payment and deduction statements — from every contractor, every tax month
• Monthly EPS submissions — records of what was declared and when
• Full Payment Submissions (FPS) — payroll records for the year
• CIS monthly returns (if you also pay subcontractors)
• Company accounts — must show CIS income clearly
• Corporation Tax return (CT600) — year-end position

HMRC cross-references all of these. Mismatches between deduction statements, EPS filings, and the CT600 are a common trigger for compliance checks. The figures must reconcile exactly — any gap invites questions.

Common Mistakes Limited Companies Make with CIS

• Double-counting CIS in both EPS and CT600 — if deductions are correctly offset via EPS during the year, only the unrecovered surplus goes in the CT600. Claiming the full year's CIS in CT600 regardless of EPS offsets creates a discrepancy HMRC will flag
• Trying to offset CIS against Corporation Tax directly — must go through EPS/PAYE first
• Using the director's personal UTR instead of the company UTR — contractors verify the company, not the individual
• Not having a PAYE scheme — no PAYE scheme means no EPS, no monthly offset
• Missing monthly EPS submissions — deductions accumulate without being offset, creating unnecessary cash flow pressure
• Not keeping deduction statements — HMRC checks these against EPS declarations
• Not registering the company separately — the company's CIS registration is separate from any sole trader registration the director holds

Your Limited Company CIS Checklist

• Register the company for CIS using form CIS305 and the company UTR
• Set up a PAYE scheme if you don't have one — required for EPS submissions
• Give contractors the company name and company UTR for verification
• Collect CIS payment and deduction statements every tax month
• Submit EPS monthly showing year-to-date CIS deductions suffered
• Reconcile EPS declarations with deduction statements each month
• At year end, check for unrecovered surplus and include in CT600
• Apply for gross payment status once compliance record is clean for 12 months