Both Contractors and Subcontractors need to register with HMRC for the Construction Industry Scheme. If a Subcontractor is paid by the Contractor then registering with the CIS scheme will mean the employer will deduct 20% VAT, but if they are not registered then 30% will be deducted. Contractors need to familiarise themselves with how to verify subcontractors and calculate the CIS tax and record payments to Subcontractors each month.