CIS for Partnerships and Joint Ventures

CIS and Partnerships

Partnerships are common in the construction industry. Two or more people working together as a partnership — whether a general partnership or a limited liability partnership (LLP) — fall within CIS if they carry out construction work.

The rules differ slightly from those for sole traders and limited companies.

Registering a Partnership for CIS

As a Subcontractor

Both the partnership and each individual partner must be registered:

• The partnership registers using its own UTR (separate from the partners' personal UTRs)
• Each partner provides their personal National Insurance number and UTR
• The partnership's trading name and business details are registered

When a contractor verifies the partnership, they use the partnership UTR and the details of the nominated partner.

As a Contractor

If the partnership pays subcontractors for construction work, it must register as a contractor. The partnership's employer PAYE reference is used for CIS filing.

Deductions from Partnership Payments

When a contractor pays a partnership, CIS deductions are made from the payment to the partnership — not from individual partners. The deduction rate depends on the partnership's verification status:

• 0% if the partnership has Gross Payment Status
• 20% if the partnership is registered
• 30% if the partnership is not registered or cannot be verified

How Partners Claim Deductions

Each partner claims their share of CIS deductions on their personal Self Assessment tax return. The share is based on the profit-sharing ratio in the partnership agreement.

For example, if a partnership received £100,000 in CIS income with £20,000 deducted, and two partners share profits equally:

• Partner A claims £10,000 in CIS deductions
• Partner B claims £10,000 in CIS deductions

Each partner reports this on their individual tax return, along with their share of the partnership's profits and expenses.

Gross Payment Status for Partnerships

Partnerships can apply for GPS, but the requirements include:

• Turnover test: At least £30,000 per partner per year from construction work
• Compliance test: Every partner must individually pass the compliance test — all personal tax returns filed on time, all tax paid on time
• Business test: The partnership must carry on a construction business

The partner compliance requirement means one partner's late Self Assessment can prevent the entire partnership from obtaining or retaining GPS. Partners should be aware of this shared responsibility.

Joint Ventures in Construction

Joint ventures (JVs) are arrangements where two or more businesses collaborate on a specific project. The CIS treatment depends on how the joint venture is structured.

Incorporated Joint Ventures

If the JV is set up as a separate limited company, it is treated as a company for CIS purposes. The JV company registers separately, is verified separately, and has its own obligations as either a contractor or subcontractor.

Unincorporated Joint Ventures

If the JV is not incorporated (it operates as a partnership or informal arrangement), the treatment is more complex:

• If the JV is a partnership, partnership CIS rules apply
• If the JV members maintain separate contracts and are paid separately, each member is treated individually for CIS purposes

The key question is whether payments are made to the JV entity or to the individual members. This determines who registers, who is verified, and who has deductions made from their payments.

Nominated Partners

In some JV arrangements, one partner is nominated to manage CIS on behalf of the JV. This is common in large construction projects where multiple subcontractors work under a JV umbrella. The nominated partner handles verification, deductions, and returns for the JV's subcontractor payments.

Common Complications

Partner Changes

When a partner joins or leaves the partnership, you may need to update your CIS registration. A new partner's compliance record affects GPS eligibility. Inform HMRC of partner changes promptly.

Profit-Sharing Changes

If the profit-sharing ratio changes during the year, the allocation of CIS deductions between partners changes accordingly. Ensure the partnership agreement is clear and up to date.

Multiple Partnerships

An individual who is a partner in multiple partnerships must ensure their personal tax compliance is maintained, as it affects all partnerships they are involved in.

Record Keeping for Partnerships

The partnership must keep:

• Records of all CIS income and deductions received
• Records of all subcontractor payments and deductions made (if acting as contractor)
• The partnership agreement (including profit-sharing ratios)
• Each partner's UTR and National Insurance number

Individual partners should also keep personal records of their share of partnership income and deductions for their Self Assessment returns.

How Accounted Supports Construction Partnerships

Accounted can manage the CIS affairs of partnerships:

• Partnership income tracking — record CIS income and deductions at the partnership level
• Partner allocation — split income and deductions according to the partnership agreement
• Individual tax estimates — each partner can see their personal tax position
• Deadline management — Penny tracks filing deadlines for both the partnership and individual partners

Check our pricing plans for partnership support.

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Partnership CIS does not have to be complicated. Sign up for Accounted and let Penny manage the CIS obligations for your construction partnership.