Subcontractor Agreement with Retention (CIS-Compliant)

This Subcontractor Agreement is widely used by construction businesses hiring subcontractors under the HMRC’s Construction Industry Scheme (CIS). It sets out clear working terms and payment structures without retention, ensuring compliance with HMRC regulations and protecting both parties from disputes.

✅ Fully HMRC & CIS-compliant – Covers tax deductions, UTR verification, and legal obligations.

✅ Clear payment terms – Supports day rate, hourly rate, or fixed-price agreements.

✅ Work quality & liability protection – Ensures compliance with industry standards.

✅ Professionally drafted & easy to edit – Tailor to your business needs in minutes.

✅ Instant download – Access your document immediately upon payment, with a copy emailed to you.

This agreement is trusted by contractors who need a professionally reviewed, HMRC-compliant contract to manage subcontractors efficiently and legally.

Yes. This subcontractor agreement is designed to meet both HMRC’s Construction Industry Scheme (CIS) rules and current UK employment law.

Subcontractors under CIS are classed as self-employed, but it’s important that the agreement clearly reflects this. If the working relationship starts to look more like employment — with fixed hours, ongoing control, or no independence — it can trigger legal issues for the contractor.

This template helps avoid that by clearly defining the subcontractor's status, scope of work, and payment terms (including CIS deductions). It sets out responsibilities on both sides in plain English, so there’s no confusion if there’s ever a dispute.

It gives you the structure to hire subcontractors the right way — with confidence, and in compliance with UK law.

Yes. This CIS subcontractor agreement is flexible enough to cover all common payment setups used in the construction industry.

Whether you're paying a subbie a fixed price for the full job, agreeing a day rate, or tracking hours worked, the template includes clear terms for each one. There are sections to set out how and when they’ll be paid, and what’s expected in return.

No matter how your subcontractors work — the document has you covered.

Yes. It’s a straightforward Word document designed to be quick and hassle-free.

Just fill in your business details and the subcontractor’s details — including name, address, UTR number, and payment terms.

Everything else is already laid out with clear, legally sound wording. You’ll have it ready to sign in minutes — no legal jargon, no complicated setup.

1. Clear status as a self-employed subcontractor
This agreement formally confirms that the subcontractor is engaged on a self-employed basis under the Construction Industry Scheme (CIS). It helps prevent misclassification by clearly separating the subcontractor from employee status — an essential protection for the contractor under UK employment and tax law.

2. Standards for conduct when representing your company
The agreement includes a clause covering the expected behaviour of subcontractors when they are representing your business — whether on-site, off-site, or in public while wearing branded clothing. It reinforces that subcontractors must act professionally, as their conduct can reflect directly on your company in front of clients, other trades, or the general public.

3. Site conduct, health and safety, and professional standards
The agreement includes clear terms covering subcontractor behaviour on-site, including adherence to health and safety regulations, site rules, and quality of work. It also outlines the contractor’s right to terminate the agreement if these standards aren’t met — such as in cases of unsafe practices, repeated absence from site, disruption to job progress, or behaviour that could damage the company’s reputation.

4. Defined payment terms
The document outlines how and when the subcontractor will be paid — whether on a fixed rate, day rate, or hourly basis. Payment frequency and invoice requirements are clearly specified to avoid confusion.

5. HMRC-compliant
The agreement includes all necessary clauses regarding CIS deductions, including rates for verified and unverified subcontractors, and provisions for those with gross payment status. This ensures the document meets current HMRC requirements and reduces the risk of compliance issues.

6. Protection for the contractor in the event of poor workmanship
If work is not completed to the required standard, the agreement provides the contractor with the right to withhold payment or recover costs to correct defects. This gives contractors a fair and legally supported process for dealing with disputes or delays caused by substandard work.

This agreement provides a clear, compliant foundation for working with subcontractors under CIS — protecting both your business and the people you hire.