How Do I Deregister from CIS When I Stop Working in Construction?

If you are leaving the construction industry, you must deregister from the Construction Industry Scheme. Find out how to inform HMRC, file your final return, and stay compliant.

Introduction

If you work in the construction industry, you are likely registered under the Construction Industry Scheme (CIS), which governs how contractors and subcontractors are paid and how tax is deducted. But what happens when you stop working in construction or no longer need to be registered?

You cannot simply stop submitting CIS returns or assume HMRC will close your account automatically. You must formally deregister from CIS to avoid penalties, tax confusion, or unnecessary paperwork.

This article explains how to deregister from CIS, the steps to take depending on whether you are a contractor or subcontractor, and what records you should keep after deregistration.

Understanding When to Deregister

You should deregister from the Construction Industry Scheme if:

  • You are closing your construction business completely.

  • You no longer work in construction or pay subcontractors.

  • You have switched to another type of business not covered by CIS.

  • You have become an employee instead of self-employed.

It is important to inform HMRC as soon as possible. Otherwise, they will continue expecting monthly CIS returns or payments, and you could receive late-filing penalties.

Deregistering as a Contractor

If you operate as a contractor, you must submit monthly CIS returns for any payments made to subcontractors. When you stop using subcontractors or close your business, you need to let HMRC know so they can remove your CIS obligations.

To deregister as a contractor:

  1. Submit your final CIS return.

    • Include all remaining payments made to subcontractors.

    • Mark the return as your final one if filing online.

  2. Notify HMRC that you have stopped operating as a contractor.

    • You can do this by calling the CIS helpline on 0300 200 3210 or through your HMRC online account.

  3. Pay any outstanding CIS deductions.

    • Settle any remaining tax due to HMRC before the end of your final tax period.

  4. Keep your records for six years.

    • HMRC may request to see past returns or payment records even after you have deregistered.

Once HMRC confirms your deregistration, you will no longer need to submit monthly CIS returns or make deductions from payments.

Deregistering as a Subcontractor

If you are a subcontractor who no longer works in construction, you must tell HMRC so they can remove your CIS registration.

You can deregister by:

  • Logging into your HMRC online account and selecting “Stop working as a subcontractor.”

  • Calling the CIS helpline (0300 200 3210) and requesting deregistration.

You may also want to:

  • File a final Self Assessment tax return to include any last CIS deductions.

  • Claim any refund you are owed if too much tax has been deducted by contractors during the year.

Once deregistered, contractors will no longer verify your CIS status, and future payments will not have CIS tax deductions applied.

If You Are Both a Contractor and a Subcontractor

Many small businesses act as both contractor and subcontractor. If this applies to you, you can choose to deregister from one role or both, depending on your situation.

For example:

  • If you no longer hire subcontractors but still do construction work for others, deregister only as a contractor.

  • If you are leaving construction completely, deregister as both a contractor and a subcontractor.

When contacting HMRC, make it clear which registration(s) you want to cancel to ensure your records are updated correctly.

Stopping CIS Returns and Payments

After deregistration, HMRC will confirm in writing that you no longer need to submit CIS returns or make deductions. Until that point, continue to file returns on time — even if there are no payments to report.

If you stop filing without officially deregistering, HMRC will issue automatic penalties, which can quickly add up.

Claiming CIS Tax Refunds After Deregistration

Even after leaving construction, you might still be due a CIS tax refund. Contractors often deduct 20% from your payments under CIS, but the amount you owe may be lower after accounting for business expenses and personal tax allowances.

To claim a refund:

  1. File your final Self Assessment tax return for the year you stopped working.

  2. Include all CIS deductions shown on your payment statements.

  3. HMRC will calculate any refund owed and issue payment, usually within a few weeks.

If you were a limited company subcontractor, your accountant can offset CIS deductions against your Corporation Tax or PAYE bill.

Keeping Records After Deregistration

HMRC requires businesses to keep CIS records for at least six years after deregistering. You should retain:

  • Copies of CIS returns and payment statements.

  • Invoices issued to contractors.

  • Bank statements showing payments received.

  • Verification and deduction records for subcontractors (if you acted as a contractor).

These records may be needed if HMRC audits your past CIS activity or questions previous tax returns.

Re-registering for CIS in the Future

If you return to construction later, you can easily re-register for CIS through your HMRC online account or by phone. You will keep the same Unique Taxpayer Reference (UTR), but you will receive a new CIS registration confirmation.

Re-registering is straightforward, but you must do so before taking on any new construction work or hiring subcontractors again.

Example Scenario

James is a self-employed builder who decides to stop working in construction and move into property maintenance. He contacts HMRC to deregister as both a contractor and subcontractor. He submits his final CIS return, pays his outstanding deductions, and files his Self Assessment tax return, claiming a small tax refund.

He keeps all his CIS records for six years in case HMRC asks for evidence later. Two years later, when he takes on a small renovation project, he re-registers for CIS quickly through his online account.

How an Accountant Can Help

An accountant experienced with CIS can make deregistration simple by:

  • Contacting HMRC on your behalf to confirm closure.

  • Preparing and submitting your final CIS returns.

  • Calculating any outstanding deductions or refunds.

  • Filing your final Self Assessment or Corporation Tax return.

  • Ensuring your bookkeeping and records are compliant before closure.

They can also help you plan the transition if you are changing industries or setting up a different type of business.

Conclusion

When you stop working in construction, it is important to deregister from CIS to prevent ongoing obligations and potential penalties. Whether you are a contractor, subcontractor, or both, you must inform HMRC officially, file any final returns, and keep your records for six years.

An accountant can guide you through the process, handle your final tax filings, and ensure you claim any CIS refund you are owed. Taking the time to deregister properly keeps your business compliant and closes your CIS account with confidence.