All contractors who work within defined sectors of the construction industry must, by law register with the CIS. Although it is not obligatory for individuals who wish to work on a self-employed basis within the construction industry to register under the CIS, if you do not register the deductions your contractor is obliged to take from you will be 30% of your earnings, rather than the standard rate of 20%.  All sub-contractors are entitled to a payment deduction statement from their contractor on a monthly basis, and must complete an annual self-assessment for tax.