The short version: A subcontractor is someone hired by a contractor to do part of a larger job. Common in construction, where a main contractor manages a project and brings in specialists for specific tasks.
Are subcontractors self employed?
Usually, but not always. Many subcontractors are self employed and invoice for their work. Some work through agencies or umbrella companies and are technically employed. Your tax obligations depend on your actual status.
What about CIS?
In construction, the Construction Industry Scheme means contractors deduct tax from subcontractor payments. The deduction rate depends on whether you’re registered. Either way, you file Self Assessment at year end and may get a refund if too much was deducted.
Setting your rates
As a subcontractor, you set your own rates and choose which jobs to take. But remember to account for tax, NI, and the fact that you don’t get holiday or sick pay.
Working as a subcontractor? Let us help you stay on top of your tax.
