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Tax year: Current CIS rates Jurisdiction: UK construction payments Last verified: May 9 2026

CIS Tax Calculator

Calculate the Construction Industry Scheme deduction from a subcontractor invoice, including registered, unregistered and gross payment status. The calculator keeps VAT and materials outside the CIS deduction base, because CIS is a withholding from labour or construction-service payments, not a deduction from the whole invoice.

Calculate CIS deduction and net payment

Enter amounts before CIS. Use the VAT setting that matches the invoice: normal VAT, domestic reverse charge, or no VAT.

£

The amount left after excluding VAT and direct material-type costs.

£
£

Plant, consumables, prefabrication or fuel if GOV.UK says they are excluded.

Registered rate

20%

The usual net payment status deduction for verified registered subcontractors.

Higher rate

30%

Used when the subcontractor is unregistered, cannot be verified, or gives wrong details.

Gross status

0%

No CIS deduction where HMRC confirms gross payment status.

The important bit: CIS is not deducted from the whole invoice

A common mistake is taking 20% off the invoice total. GOV.UK says the contractor starts with the total invoice and takes away VAT, direct materials and certain other costs before applying the CIS percentage. In practice, this means labour-only invoices have a larger CIS deduction than invoices with a clear materials element.

This calculator keeps those moving parts separate. Enter the labour or construction-services amount, add the material-type costs that should be excluded, then pick the VAT treatment. It will show the deduction base, the CIS withheld for HMRC, and the net payment due to the subcontractor.

It is useful for contractors checking a monthly payment statement, subcontractors checking whether a deduction looks sensible, or bookkeepers working out why a VAT reverse-charge invoice does not match an ordinary VAT invoice.

Invoice line CIS treatment
Labour/construction servicesNormally included in CIS deduction base.
VATTaken away before CIS is calculated.
Direct materialsTaken away if the subcontractor paid for them directly.
Plant hire/consumablesCan be taken away where the GOV.UK categories apply.

How this CIS calculator works

Inputs used

  • Subcontractor CIS status: registered, unregistered/unverified, gross payment status, or custom HMRC rate.
  • Labour or construction-services amount that should be inside the CIS deduction base.
  • Materials paid for directly and other GOV.UK-listed costs to exclude before calculating CIS.
  • VAT treatment: normal VAT, domestic reverse charge, no VAT, or custom VAT rate.

Calculation method

  • Choose the CIS rate: 20%, 30%, 0%, or the custom rate entered by the user.
  • Calculate the CIS deduction base from the labour/construction-services amount.
  • Exclude VAT, direct materials and listed costs from the CIS deduction base.
  • Calculate the CIS deduction as deduction base multiplied by the selected CIS rate.
  • Calculate the net payment as invoice amount payable to the subcontractor minus the CIS deduction.

Assumptions

  • The labour amount entered is the amount that remains after VAT and direct material-type costs are separated.
  • Materials, plant and consumable figures are assumed to be costs the subcontractor paid for directly and can evidence if asked.
  • Domestic reverse charge VAT is shown as no VAT paid to the subcontractor, but the CIS deduction base still excludes VAT.
  • CIS deductions are treated as advance payments towards the subcontractor tax and National Insurance position, not final tax.

What this does not cover

  • It does not decide whether work is within CIS. Check GOV.UK CIS scope guidance for covered and excluded construction operations.
  • It does not verify a subcontractor with HMRC or decide employment status. Contractors must consider whether the worker should be employed instead.
  • It does not calculate the subcontractor final Self Assessment bill or refund. Use the Self-Employed Tax Calculator or CIS Tax Rebate Calculator for those wider checks.
  • It does not decide VAT domestic reverse charge status. Use the VAT Calculator for basic VAT arithmetic and GOV.UK reverse-charge guidance for construction VAT treatment.

Worked example: labour plus materials

Say a registered subcontractor invoices GBP 2,500 for labour and GBP 600 for materials they paid for directly. If normal 20% VAT applies to both lines, the invoice before CIS is GBP 3,720. The CIS deduction is not 20% of GBP 3,720.

Instead, the CIS base is the labour amount: GBP 2,500. The 20% deduction is GBP 500, and the contractor pays that GBP 500 to HMRC as a CIS deduction. The subcontractor receives GBP 3,220 from the contractor and uses the CIS statement later when working out tax, NI or company set-off.

If the same subcontractor was unregistered or could not be verified, the deduction would be GBP 750 at 30%. If HMRC confirmed gross payment status, the deduction would be GBP 0.

Before relying on a CIS result

Contractors should verify the subcontractor with HMRC before payment and use the deduction rate HMRC gives. The calculator can model 20%, 30% and gross status, but it cannot replace verification.

If the subcontractor has materials on the invoice, keep receipts or other evidence. GOV.UK says contractors can ask for evidence that materials were paid for directly. Without evidence, the contractor may estimate the materials cost.

Also check VAT separately. Many B2B construction services reported under CIS use the VAT domestic reverse charge, but not every construction invoice does. End-user, intermediary, employment business and VAT-rate details can change the invoice treatment.

Common CIS deduction mistakes

Deducting from VAT

VAT is taken away before the CIS deduction is calculated. Do not withhold CIS from the VAT element.

Ignoring materials evidence

Materials are excluded only where the subcontractor paid for them directly, and the contractor can ask for evidence.

Using 20% without verification

The 30% higher rate can apply if the subcontractor is not registered, cannot be verified, or gives the wrong business name.

Treating CIS as final tax

CIS is paid to HMRC in advance. The final position depends on the subcontractor tax return or company set-off rules.

CIS tax FAQs

What are the CIS deduction rates?
The standard CIS deduction is 20% for registered subcontractors, 30% for unregistered or unverifiable subcontractors, and 0% where HMRC confirms gross payment status.
Is CIS deducted from materials?
No. GOV.UK says contractors take away VAT and certain costs such as materials paid for directly before applying the CIS deduction rate to the remaining amount.
Is CIS deducted before or after VAT?
CIS is calculated after VAT has been taken away from the invoice amount. VAT itself is not part of the CIS deduction base.
Is CIS the final tax bill?
No. CIS deductions are advance payments towards the subcontractor tax and National Insurance bill. The final position is worked out through Self Assessment or company set-off/refund rules.
Does the VAT domestic reverse charge change the CIS deduction?
The VAT domestic reverse charge can change whether VAT is paid to the subcontractor, but CIS still applies to the labour or construction-service amount after excluding VAT and allowable material costs.

Official sources

Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.

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