TL;DR Using subcontractors lets you take on more work without taking on employees. But without a clear system, things go wrong fast. This guide covers how to vet subcontractors properly, what to put in a written agreement, what the Construction Industry Scheme means for you as the one paying, and how to share jobs without handing over access to your whole business.
If you're a sole trader or running a small team, using subcontractors is one of the simplest ways to take on more work without taking on more employees. You bring in the right person for the job, pay them for the work, and move on. No payroll, no contracts of employment, no permanent overheads.
But it only works if you've got a system. Without one, you end up with subcontractors who don't know which site they're on, customers who don't know what's happening, and jobs that drag because someone didn't get the right information at the right time.
This guide covers how to find and vet subcontractors, what to agree before work starts, how to share job information without handing over everything, and what the tax rules actually mean for small trade businesses in the UK.
Why do tradespeople use subcontractors?
The straightforward answer is flexibility. Using subcontractors lets you say yes to bigger jobs. It lets a plumber bring in a tiler to finish a bathroom. It lets an electrician get a plasterer in to make good after first fix. It lets a fencing contractor take on a larger site without hiring someone full time.
The alternative is turning down work or stretching your own capacity until something breaks. Neither is a good long-term strategy if you want to grow.
The key difference between a subcontractor and an employee is the nature of the relationship. HMRC defines a subcontractor as someone who is self-employed and takes on work from a contractor, rather than being employed by them. They invoice for their work, manage their own tax, and are responsible for their own insurance and equipment.
Getting this distinction right matters, because misclassifying an employee as a subcontractor can result in back payments of tax and National Insurance, plus potential penalties. If someone works exclusively for you, uses your equipment, and follows your instructions on how to do the work, HMRC may decide they're actually an employee, regardless of what the contract says.
How do you find good subcontractors?
Word of mouth is still the most reliable route. Other tradespeople you've worked with, suppliers who deal with multiple contractors, or people you've crossed paths with on previous jobs. A subcontractor who's been recommended by someone you trust is a very different proposition to someone you've found cold.
Beyond referrals, trade associations can be useful. Checkatrade, MyBuilder, and Rated People all carry reviews and, in some cases, verification of qualifications and insurance. They're not a substitute for your own checks, but they give you a starting point.
For specialist work, trade bodies are worth knowing about. Gas engineers should be registered with Gas Safe. Electricians should be registered with a competent person scheme such as NICEIC or NAPIT. These registrations are publicly searchable, so you can verify someone's status before you commit to anything.
What should you check before taking on a subcontractor?
Three things matter before you put someone on a job: their qualifications, their insurance, and their CIS registration status.
Qualifications vary by trade. For regulated trades, the check is straightforward: look them up on the relevant register. For less regulated trades, ask to see evidence of any relevant training or accreditation, and check their previous work if you can.
Insurance is non-negotiable. At minimum, a subcontractor should carry public liability insurance. Public liability insurance protects against claims for injury or damage caused to third parties during the course of work. Ask for a copy of their certificate and check the expiry date. If they can't produce one, don't use them.
CIS registration is covered in more detail below, but in short: if you're paying a subcontractor for construction work, you need to know whether they're registered with HMRC's Construction Industry Scheme before you pay them.
What should you agree before work starts?
The more you agree upfront, the less you'll argue about later. A written record of what's been agreed is worth having for any subcontract relationship, even if it's just a message thread or an email.
The things worth pinning down are: the scope of work, the rate of pay (day rate or fixed price), who supplies materials, who is responsible for waste removal, what the expected timeline is, and how disputes will be handled if the work isn't up to standard.
You don't need a solicitor-drafted contract for every job. But you do need something that both parties have agreed to in writing, so there's no ambiguity about what was expected if things go wrong.
How does the Construction Industry Scheme (CIS) work?
CIS is a tax scheme that applies to payments made by contractors to subcontractors for construction work. If you're paying subcontractors, you're likely a contractor under CIS, which means you have obligations.
CIS applies to work including installation of systems like plumbing, heating and electrical, as well as decoration, groundwork, roofing, scaffolding and more.
As a contractor, you need to verify each subcontractor with HMRC before you pay them. Depending on their registration status, you'll either pay them gross (no deduction), deduct 20% at source (registered subcontractor), or deduct 30% (unregistered). The deductions are paid to HMRC and count toward the subcontractor's tax liability.
You'll also need to file monthly CIS returns with HMRC, even in months where you've made no payments. HMRC's CIS online service handles verification and returns. If this is new to you, an accountant who works with tradespeople is worth talking to before you take on your first subcontractor.
How do you share job information with subcontractors without sharing everything?
This is where most informal systems fall apart. You add a subcontractor to a WhatsApp group, and suddenly they can see every message, every customer detail, and every conversation from the last six months. Or you send them a PDF job sheet that contains more information than they need.
The problem is that subcontractors are often working across multiple businesses at once. Someone you use for tiling might also work for three other plumbers in your area. You don't want your customer list, your pricing, or your job notes sitting in their phone alongside work from your competitors.
A CRM built for tradespeople handles this differently. In Trader CRM, each person has their own account. You can invite a subcontractor to a specific job, and that's all they can see: the job details, the site photos, and the status updates relevant to their work. They can't see your other customers, your other jobs, or anything you haven't explicitly shared with them.
This structure works for subcontractors who work across multiple businesses too. They can be part of several teams, each with their own job access, without any of those businesses seeing each other's data. For more on how this works in practice, see our guide to managing subcontractors as a sole trader.
What are the most common problems when working with subcontractors?
Most problems come down to communication and expectation. The subcontractor didn't know the full scope of the job. The customer wasn't told someone else would be on site. The work wasn't up to the standard you'd agreed. Payment terms weren't clear.
The practical fixes are straightforward: agree everything in writing before work starts, make sure the subcontractor has everything they need to do the job properly, and keep the customer informed about who's doing what and when.
The information side is where a proper system helps most. If a subcontractor can see the job details, the site photos, and the current status directly from their phone, there's no excuse for turning up unprepared or to the wrong address. And if you can see when they've checked the job, you know the information has been received.
Get started with Trader CRM
Managing subcontractors well isn't complicated. It comes down to clear agreements, the right checks before work starts, and a system that makes it easy to share the right information with the right people.
Trader CRM is built for tradespeople who work with subcontractors. Invite them to specific jobs, control what they can see, and keep your customers and job details secure. One price, full access, no complicated setup.
Try Trader CRM and see how it works for your business.
