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Labour only. VAT, materials you bought, plant hire, fuel and consumables all come off before it is worked out.
Your contractor pays it to HMRC for you. It counts towards your tax and National Insurance for the year.
If more was taken than you owe, the difference comes back to you after your tax return is sorted.
CIS is only worked out on the labour part of an invoice. Start with the invoice total before VAT, take off materials you paid for, plant hire, fuel used on the job and consumables, then apply your rate.
| Example invoice | Amount |
|---|---|
| Labour | £2,000.00 |
| Materials you bought | £500.00 |
| CIS deduction at 20% (on labour only) | −£400.00 |
| You get paid | £2,100.00 |
If you know what you were paid and want the gross amount, divide the labour you received by 0.8 at the 20% rate, or by 0.7 at the 30% rate. £1,600 of labour paid after 20% CIS was £2,000 gross, with £400 deducted.
CIS is never taken from VAT. Many building jobs between VAT-registered businesses also fall under the domestic reverse charge, where your contractor accounts for the VAT instead of paying it to you. Check with your accountant which applies to each job.
CIS deductions are payments towards your tax and National Insurance, not extra tax. Once the tax year ends on 5 April, sole traders put the total deducted on their Self Assessment tax return. If more was deducted than you owe, HMRC refunds the difference. Keep every monthly payment and deduction statement your contractors send you, because you need them for the return.
There are three. Contractors take 20% from registered subcontractors, 30% from subcontractors who are not registered for CIS, and nothing from those with gross payment status. HMRC tells your contractor which rate to use when they verify you.
No. CIS is only taken from the labour part of your invoice. Before working it out, your contractor removes VAT, materials you paid for, plant hire, fuel used for the job (not travel) and consumables. Show materials clearly on every invoice so they are not taxed by mistake.
CIS deductions are advance payments towards your tax and National Insurance. Sole traders include them on their Self Assessment return, and anything overpaid is refunded. Limited companies set them against what they owe through their monthly payroll submissions to HMRC.
You apply to HMRC and must pass three tests: a business test, a turnover test and a compliance test, which checks your tax has been filed and paid on time. From April 2026, HMRC can remove the status straight away if a business is linked to tax fraud in its supply chain.
No. VAT is taken out before CIS is worked out. Many building services between VAT-registered businesses also fall under the domestic reverse charge, where the contractor accounts for the VAT instead of paying it to you. Check with your accountant which applies to each job.
Add up the CIS deducted across the tax year from your payment and deduction statements. Then work out the tax and National Insurance you owe on your profit. If the CIS deducted is more than that, the difference is your rebate, paid after you file your Self Assessment return.
Divide the labour you were paid by 0.8 if you are on the 20% rate, or by 0.7 on the 30% rate. That gives the gross labour figure before CIS. For example, £1,600 received at 20% means £2,000 gross, with £400 deducted.
No. The 20% is an advance payment. Your actual tax depends on your profit for the year after expenses and your personal allowance. Many subcontractors pay less than 20%, which is why CIS rebates are common.
No. The calculator works entirely in your browser, and nothing you type is saved or sent to us. It is a guide only, not tax advice.
