CIS deduction calculator
See exactly what the contractor deducts, and what actually hits the bank. No sign-up, no email, nothing stored.
The invoice
- Labour and services £0.00
- Materials, plant and consumables Not deducted from £0.00
- Travel and subsistence Deducted from £0.00
- Invoice total excluding VAT £0.00
The payment
- VAT £0.00
- Invoice total £0.00
- Less CITB levy £0.00
- Less CIS deduction £0.00
- Net payment £0.00
Everything stays in your browser. The figures are worked out on your own device and are never sent to us or stored anywhere.
This calculator follows the rules in CIS340 and the GOV.UK guidance on making deductions. It is general information, not tax advice - check anything unusual with your accountant or with HMRC.
How a CIS deduction is actually worked out
The Construction Industry Scheme makes contractors take money off what they pay subcontractors and send it to HMRC as an advance payment towards the subcontractor's tax and National Insurance. The part people get wrong is what the percentage is applied to. It is never the invoice total.
Start with the invoice, then take off, in this order:
- VAT charged by the subcontractor, if they are VAT registered.
- The direct cost of materials - what the subcontractor actually paid for them.
- Plant hired specifically for the job, and consumable stores.
- Fuel used doing the work, but not fuel used getting there.
- Any CITB levy the contractor is recharging.
Apply 20% or 30% to what is left. That is the deduction. Everything you took off is still paid to the subcontractor in full.
The three rates
| Rate | When it applies | What to do |
|---|---|---|
| 0% | The subcontractor holds gross payment status. | Pay in full. You still report the payment on your monthly CIS return. |
| 20% | The subcontractor is registered for CIS and HMRC has matched them on verification. | The normal case. Verify before the first payment to get this rate. |
| 30% | The subcontractor is not registered, or HMRC could not match them. | If it is a matching problem, fix the details and re-verify - it usually drops to 20%. |
A worked example
A registered subcontractor invoices £1,000 of labour and £300 of materials they bought themselves, plus 20% VAT.
- Invoice: £1,000 + £300 = £1,300, plus £260 VAT = £1,560.
- Deduction base: £1,300 less £300 of materials = £1,000. The VAT was never in it.
- Deduction: 20% of £1,000 = £200, paid to HMRC.
- Payment to the subcontractor: £1,560 less £200 = £1,360.
At the 30% rate the deduction is £300 and the payment is £1,260. With gross payment status there is no deduction and the payment is the full £1,560.
The mistakes that cost money
- Deducting from the VAT. VAT comes out before the rate is applied. Taking 20% off a VAT-inclusive total over-deducts by a fifth.
- Deducting from materials. Materials the subcontractor paid for are excluded - but only at cost. Margin added on materials is part of the payment.
- Excluding travel. Travel and subsistence stay in the base. It is the one that catches people out, because it feels like an expense rather than labour.
- Not verifying. Paying an unverified subcontractor at 20% leaves the contractor liable for the 10% shortfall, not the subcontractor.
- Missing the return. The monthly CIS return is due by the 19th. The penalty starts at £100 for one day late, whatever the size of the payment.
Getting it back
For a subcontractor, CIS deductions are money on account, not money gone. A sole trader claims them on the Self Assessment return against income tax and Class 4 National Insurance. A limited company sets them against its PAYE and National Insurance bill through the EPS, and reclaims the balance at the end of the tax year. Either way you need the payment and deduction statement the contractor has to give you within 14 days of the end of each tax month, so chase the ones that do not arrive.
CIS questions, answered
What is the CIS deduction applied to?
The labour element of the payment. Before applying the rate, the contractor takes off VAT, the direct cost of materials, plant hire, consumable stores, fuel used on the job and any CITB levy they are recharging. What is left is the amount the 20% or 30% is calculated on.
Are the CIS rates 20% or 30%?
Both, depending on the subcontractor. It is 20% for a subcontractor registered with HMRC and successfully verified, 30% where HMRC cannot match them, and 0% for a subcontractor with gross payment status. Verifying a subcontractor before the first payment is what moves them off the 30% rate.
Is travel deducted from under CIS?
Yes. CIS340 paragraph 3.11 is explicit that travelling expenses, including fuel for travel, and subsistence paid to or on behalf of the subcontractor stay in the amount the deduction is calculated on. Fuel used on the job itself, as opposed to fuel for travelling, comes out as a consumable.
Can a subcontractor add a margin to materials?
They can charge what they like, but only what they actually paid comes out of the deduction base. If materials cost 200 pounds and the subcontractor charges 250 pounds for them, the extra 50 pounds is part of the payment and is deducted from at 20% or 30%. A contractor is entitled to ask for evidence of the direct cost.
Does the VAT reverse charge change the CIS deduction?
No. The deduction is calculated on exactly the same figure either way, because VAT was never part of the base. What changes is the cash: under the reverse charge the contractor pays the net invoice less the deduction, and accounts for the VAT on their own return instead of paying it to the subcontractor.
Is the CIS deduction the tax I owe?
No. It is a payment on account. A sole trader sets the deductions against the income tax and Class 4 National Insurance worked out on their Self Assessment return, and a limited company sets them against its PAYE and National Insurance liabilities. It is common to get some of it back.
Stop working CIS out on the back of an invoice
Pipeline prices the job, raises the invoice and keeps the paperwork straight - so the numbers are right before anyone asks.