You've probably worked a job where you didn't know who was in charge—just that someone showed up, gave orders, and someone else was in the trenches laying bricks or pulling wires. In construction, a major difference is that contractors run the show, and subcontractors handle the specialist jobs.
Knowing which role fits you changes how you get paid, who you answer to, and what your day-to-day looks like.
In this guide, you'll learn the real difference between a contractor and subcontractor, how it affects your trade career, and what to watch for under the UK's Construction Industry Scheme (CIS).
What Do Contractors Do in Construction?
Contractors are the point person between the client and everyone else on site. Let's take a closer look:
Defining a Contractor
A contractor is typically hired directly by the client to deliver the entire project from start to finish. The contractor is responsible for turning the client's vision into reality, such as building a house, renovating, or even commercial construction work.
They are responsible for planning, hiring, and project management across all phases. This includes:
- Securing permits
- Coordinating trades
- Managing budgets
- Keeping timelines on track
Contractors also decide on timelines, budgets, and quality control standards. The contractor sets these expectations and holds everyone accountable for meeting them.
Main Responsibilities of a Contractor
General contractors hire specialists for specific tasks while maintaining oversight of the entire project. That means, they typically manage subcontractors across all the fields needed to complete the whole job, like plumbing, electrical work, carpentry, and more.
A contractor makes sure work complies with laws, safety standards, and contract agreements. The contractor must verify that all work meets building regulations and client specifications.
They also tend to handle client communication and payment flow throughout the project. The contractor is the primary point of contact, updating clients on progress and managing expectations.
When Contractors Are Essential
When large construction work, housing developments, or renovation projects require coordination across multiple trades, you need a point person. That one person or company must carry ultimate responsibility for delivering the finished property.
Jobs where one person or company coordinates many businesses and teams simultaneously will get messy fast. Without a contractor managing the scope and process, these projects would feel all disjointed, and no one is being held accountable.
What Do Subcontractors Do in Construction?
Subcontractors bring specialist expertise to complete specific parts of a building job. Let's dig in.
Defining a Subcontractor
Subcontractors are usually brought in by the main contractor, not hired directly by the client. Subcontractors work on behalf of the contractor rather than dealing with property owners themselves.
They're only responsible for specific tasks or specialist areas where they have expertise. For example, a plumber handles water systems, an electrician manages electrical installations, and a roofer covers roofing work. Each person is focusing on specific areas rather than the entire build.
Usually, they're self-employed individuals or small businesses operating across multiple projects. This flexibility allows subcontractors to build experience and spread risk. An employer relationship doesn't exist in the traditional sense. Subcontractors work for themselves, even when hired by contractors.
Main Responsibilities of a Subcontractor
They're expected to perform work in their trade to agreed standards. Subcontractors complete the tasks they're hired for without managing other aspects of the project.
They meet deadlines set by the contractor who coordinates the overall schedule. While delays from one subcontractor impact everyone else on site, it's up to the contractor to deal with wider project concerns. Subcontractors stick to their specific task, focusing on maintaining quality without managing the entire project budget or client relationship.
When Subcontractors Are Essential
When specialist services that need trained skills the main contractor doesn't have in-house, hiring subcontractors gives them access to expertise without permanent employees' obligations.
Subcontractors help contractors by:
- Scaling up labour for bigger projects when the contractor’s own crew isn’t enough.
- Working flexibly across multiple jobs and contractors without long-term commitments.
- Handling short-term or task-based work where it makes more sense to bring in a specialist than to hire full-time.
- Providing access to niche skills or certifications that aren’t needed all the time.
- Allowing contractors to take on more jobs without increasing permanent overhead.
Who Does What? Key Differences Between the Roles
Understanding these distinctions helps you decide which path suits your skills and business goals:
The key differences centre on control versus flexibility. Contractors carry more risk but control the entire project. Subcontractors focus on their trade without managing broader project concerns.
Why Subcontracting and Contracting Are Growing
Subcontracting demand is rising as the construction industry labor shortages and firms need to scale teams quickly. In fact, 36% of UK construction firms report struggling to find staff, creating more opportunities for flexible subcontractors who can step in quickly.
How CIS Tax Rules Affect You
The Construction Industry Scheme governs how contractors and subcontractors handle tax in the UK:
How CIS Affects Contractors
If you’re paying subcontractors for construction work, you’ll need to register with HMRC under the Construction Industry Scheme (CIS). That means handling tax deductions properly is your responsibility.
Before paying subcontractors, you’ll need to deduct tax at source. It’s 20% if they’re registered with HMRC, or 30% if they’re not. You then pass that tax on to HMRC directly.
But first, you’ve got to verify each subcontractor with HMRC. That check confirms their status and tells you which rate to apply. Be sure to check this so you don’t end up deducting the wrong amount or falling foul of the rules.
How CIS Affects Subcontractors
Subcontractors should register with HMRC to get higher-rate tax deductions. Unregistered subcontractors lose 30% of gross payment versus 20% for registered workers.
Subcontractor's payments are taxed at the source, and count toward your annual tax bill.
If you’ve overpaid, you can claim it back through your Self Assessment. Most subcontractors do, and can get a tidy refund once everything’s squared up.
Learn more about CIS rules from HMRC's official guidance.
Common Mistakes with CIS
The Construction Industry Scheme (CIS) keeps things above board between contractors, subcontractors, and HMRC, but only if everyone does their bit properly. Miss a step, and you could end up with fines, overpayments, or a nasty letter from the taxman.
Here are the most common mistakes to watch for:
- Skipping subcontractor verification – Contractors who don’t check with HMRC before the first payment risk using the wrong tax rate and getting hit with penalties.
- Not registering as a subcontractor – Unregistered workers lose 30% of their pay instead of 20%. Signing up only takes minutes and saves serious cash.
- Poor record-keeping – Failing to track deductions, monthly returns, or verification details can lead to compliance headaches for both parties.
Sorted paperwork, correct registrations, and proper checks keep everything running smoothly.
Risk and Responsibility in Construction
Financial pressure hits construction harder than most industries. The construction industry is volatile, and many businesses fail when risks aren’t managed. In Q2 2025, it made up 16.3% of all UK insolvencies—proof that solid structures and financial controls matter.
Contractors carry more risk. If the entire project goes over budget or fails, the contractor is responsible. One major issue can take down a whole business.
Subcontractors reduce risk by working across multiple jobs and contractors. If one contractor fails to pay, other work still brings in income.
Clear contracts help. When roles and responsibilities are defined, it’s easier to avoid disputes, manage payments, and stay on track.
Independent Contractor vs Subcontractor
Both roles involve self-employment, but they operate very differently when it comes to responsibility, control, and how they work with clients:
An independent contractor typically manages the client relationship and delivers full services directly. They might take on small renovation jobs, maintenance contracts, or specialist installs.
Subcontractors, by contrast, work under someone else’s contract. They focus on their specific trade, performing work to the primary contractor’s schedule and specs.
Experience Smarter Field Service Management
Ready to see how Intrflex can transform your workflow? Book a free demo and discover how easy it is to manage jobs, teams, and tasks from a single powerful platform.
Book a demoWhich Role Suits Your Skills and Goals?
Here’s how to figure out which path fits best.
When You Might Prefer Being a Contractor
If you like running the show and don’t mind carrying the weight that comes with it, contracting could suit you. You might prefer this role if:
- You’ve got strong management skills and enjoy leading a team across long-term projects.
- You’re comfortable handling contracts, budgets, and regular updates to clients.
- You want full responsibility for the entire project — and the higher earning potential that comes with it.
Contractors carry more risk, but they also control the job from start to finish. You decide how it runs and who gets hired to help complete the work.
When You Might Prefer Being a Subcontractor
If you’d rather stay focused on the tools and leave the client handling to someone else, subcontracting might be the better fit. It’s a solid route if:
- You want to focus on your trade skills without managing clients or admin.
- You’re building experience before stepping up to full project management.
- You prefer task-based work with fewer business distractions and a steady routine.
Subcontractors perform work under someone else’s direction. You still get paid for your expertise, but without carrying the full weight of the job.
Smarter Job Management for Contractors and Subs
Both contractors and subcontractors deal with heavy admin, and without proper systems, it quickly gets out of hand.
Contractors manage entire projects, often with multiple subcontractors involved. That means tracking schedules, verifying CIS status, managing subcontractor’s payments, and keeping clients updated from start to finish.
Subcontractors balance jobs across different contractors. Each one has its own payment terms, deadlines, and site requirements. Missed paperwork or late delivery can hit your income or damage your reputation.
The smart move is using one system to handle it all. Job tracking, payments, and schedules shouldn’t be scattered across spreadsheets, notebooks, or memory.
Field management service software like Intrflex cuts the admin and keeps jobs profitable. It’s built to support contractors managing teams across full builds, and subcontractors handling specialist work across multiple sites.
Supporting Your Next Career Move
Contractors and subcontractors might sound similar, but the roles, risks, and rewards are totally different. One runs the site. The other gets the job done.
See how Intrflex handles the admin so you can handle the tools. Book a demo.
Another big difference between a contractor and subcontractor is who hires them and the scope of responsibility. Contractors are hired directly by the client to manage the entire project. They handle the budget, schedule, and quality checks across all trades. Subcontractors are hired by contractors to complete specific tasks within their expertise.
The same person or business can be an independent contractor on some jobs and a subcontractor on others. Your role depends on the specific contract agreement, not your business structure.
The term "subcontractor" specifically means you're hired by someone other than the end client. When you contract directly with property owners, you're operating as an independent contractor regardless of your usual role.
The contractor may also face legal action, damage to reputation, and have difficulty hiring subcontractors for future work. This is why clear contracts, payment schedules, and proper insurance coverage are crucial for managing risk in construction work.
Subcontractors often earn steady day rates or task-based payments with lower overhead and risk. Top specialists can command premium rates approaching or exceeding what smaller contractors earn, especially those with in-demand expertise who work across multiple jobs simultaneously.
