Construction businesses operating under the Construction Industry Scheme (CIS) face a very different set of responsibilities to most other sectors.
Running payroll is only part of the job. Contractors are also responsible for correct CIS deductions, worker verification, Right to Work checks, and accurate monthly reporting to HMRC, all of which must stand up to scrutiny if an inspection takes place.
That’s why many construction SMEs choose to work with specialist CIS and payroll companies.
This guide explains what CIS and payroll companies do, why they matter, and what construction firms should look for if their priority is staying compliant and reducing HMRC risk.
What is a CIS and payroll company?
A CIS and payroll company supports construction businesses with the day-to-day and ongoing compliance requirements of the Construction Industry Scheme.
This typically includes:
- CIS registration and subcontractor verification with HMRC
- Accurate payroll processing for subcontractors and PAYE employees
- Applying the correct CIS deductions (GROSS, 20% or 30%)
- Submitting monthly CIS returns
- Managing Right to Work checks
- Reducing exposure to HMRC penalties, audits, and misclassification issues
Unlike general payroll providers, CIS and payroll companies specialise in construction, a sector where compliance rules are stricter and the consequences of mistakes are far more serious.
Why construction firms use specialist CIS payroll providers
For most construction business owners, CIS and payroll isn’t just admin, it’s risk.
Specialist providers help by:
Reducing compliance risk
Ensuring CIS deductions, employment status, and Right to Work checks are correct and documented.
Handling HMRC reporting
Monthly CIS returns are submitted accurately and on time, avoiding fines and follow-up inspections.
Peace of mind for directors
Many construction SMEs want reassurance that compliance is being handled properly, not just processed.
Supporting inspections and audits
The best CIS and payroll companies don’t disappear when HMRC asks questions.
What to look for in a CIS and payroll company
Not all CIS and payroll providers offer the same level of protection. Construction firms should look beyond basic payroll processing and consider whether a provider offers:
- CIS verification and ongoing compliance support
- Payroll for both subcontractors and PAYE workers
- Right to Work checks aligned with HMRC expectations
- Clear accountability if issues arise
- Experience supporting HMRC inspections
- Construction-specific expertise (not generic payroll)
The key question to ask is not “Do they run payroll?” but “What happens if HMRC investigates?”
Payroll-only vs compliance-led CIS providers
Some CIS payroll companies focus primarily on processing payments and submitting returns.
- Compliance-led providers go further by:
- Ensuring correct worker classification
- Managing Right to Work checks properly
- Supporting contractors during HMRC inspections
- Helping prevent penalties before they arise
This distinction matters because HMRC liability almost always sits with the contractor, not the payroll provider.
For construction businesses, compliance support is often far more valuable than low-cost processing alone.
How Hudson supports CIS and payroll compliance
Hudson Contract works with construction SMEs who want confidence that their CIS and payroll obligations are being handled properly, not just processed.
- Hudson’s approach combines:
- CIS management and payroll support
- Right to Work checks and employment status guidance
- Clear documentation and audit trails
- Support if HMRC carries out an inspection
The focus isn’t just paying people correctly each month, but reducing risk for contractors over the long term.
FAQs: CIS and payroll companies
Are CIS payroll companies responsible if HMRC finds an issue?
Responsibility typically remains with the contractor. That’s why many construction firms choose providers who actively navigate inspections and compliance reviews, not just payroll processing.
Do CIS payroll companies handle right-to-work checks?
Some do, some don’t. Construction firms should confirm this explicitly, as Right to Work failures can lead to serious penalties.
Is CIS payroll suitable for small construction companies?
Yes. Many CIS and payroll companies specialise in supporting SMEs who don’t have in-house compliance expertise.
Choosing the right CIS and payroll company
If you’re a construction business owner, the right provider isn’t just the cheapest payroll processor. It’s the one that helps you:
- Stay compliant
- Reduce HMRC risk
- Avoid hidden exposure
- Sleep better when inspections happen
That’s the real value of a specialist CIS and payroll company like Hudson Contract.