Calculate CIS deductions, net payment received, and your estimated Self Assessment balance to pay or reclaim
Under the Construction Industry Scheme, contractors deduct 20% from payments to registered subcontractors and 30% from those who are not registered. Subcontractors with gross payment status have nothing deducted. The deduction is an advance payment towards your income tax and Class 4 National Insurance, applied to labour only — materials and VAT are excluded — which is why many subcontractors are due a refund at self-assessment.
The rates used here. See the CIS deduction rates applied in this calculation, each with its official source and the date UKCalc last checked it, on the 2026/27 rates and thresholds UKCalc uses.
Your CIS payment
£
£
£
£
Net payment you receive
Gross payment (labour)
Materials (excluded from CIS)
CIS deduction
Net cash received
CIS deducted this payment
Previous CIS this tax year
Running CIS credit (total)
Estimated Self Assessment position
Annual profit
Income tax owed
Class 4 NI owed
Total SA liability
CIS credit (year to date)
Estimate only — based on profit entered and 2026/27 rates. Does not include payments on account, student loans, or other income. File your SA return for the exact figure.
CIS deduction rates 2026/27
Status
Rate
Gross payment status
0%
Registered & verified
20%
Unregistered / unverified
30%
Deductions apply to the labour element only. Materials recharged at cost are excluded.
Key CIS deadlines
19th of each month — contractor CIS returns due
31 January — Self Assessment filing + any tax owed
31 October — paper SA return deadline
CIS credits are offset against your SA bill. Overpaid CIS is refunded after filing.
The Construction Industry Scheme (CIS) is a HMRC tax collection system designed for the construction industry. Under CIS, contractors deduct money from subcontractor payments before handing it over. Those deductions are paid directly to HMRC and count as advance payments towards the subcontractor's Income Tax and National Insurance bill — similar to how PAYE works for employees, but administered differently.
CIS applies across a wide range of construction activities: building, demolition, repairs, civil engineering, decorating, installation of heating and electrical systems, and more. If you work in construction as a subcontractor — whether as a sole trader or limited company — you are almost certainly within scope.
What is deducted?
The deduction is calculated on the labour element of the payment only. If your invoice includes materials you have bought and recharged to the contractor, those materials are excluded. This is why it is important to always separate labour and materials clearly on your invoices — HMRC scrutinises invoices where the materials proportion looks unusually high.
The three deduction rates
0% — Gross payment status: You receive the full invoice amount. Your contractor still has to verify you with HMRC but does not deduct anything. You are responsible for budgeting your own tax payments via Self Assessment.
20% — Standard (verified subcontractor): You are registered with HMRC as a CIS subcontractor and the contractor has verified your status. 20% of the labour element is deducted from every payment.
30% — Unregistered or unverified: If you are not registered with CIS, or your contractor cannot verify you with HMRC, they must deduct 30%. Registering with HMRC costs nothing and takes minutes — it immediately drops your rate to 20%.
Claiming your CIS credits back
At the end of the tax year, when you file your Self Assessment return, HMRC totals up all the CIS that was deducted and offsets it against your income tax and Class 4 NI bill. If your CIS credits exceed what you owe, HMRC refunds the difference. Refunds are typically processed within a few weeks of filing online.
You must keep all your CIS vouchers (or statements from contractors) as evidence of deductions suffered. Contractors are required to give you a monthly deduction statement for any month in which a deduction was made.
How to apply for gross payment status
To receive payments with no CIS deduction, you need to apply for gross payment status through your Government Gateway account. HMRC assesses three criteria: you must have a good compliance record (tax returns filed and payments made on time), your business must be genuinely trading in construction, and your annual turnover must be at least £30,000 net (for sole traders) or £100,000 net (for companies). HMRC reviews gross payment status periodically and can withdraw it if your compliance slips.
Frequently asked questions
CIS (Construction Industry Scheme) is a HMRC scheme that requires contractors to deduct money from subcontractor payments and pass it directly to HMRC. It applies to subcontractors working in the UK construction industry — including building, demolition, installation, repair, and civil engineering work. The deductions count as advance payments towards the subcontractor's Income Tax and National Insurance bill.
There are three CIS deduction rates: 0% for subcontractors with gross payment status (you keep the full payment and pay tax via Self Assessment); 20% for registered subcontractors verified by HMRC; 30% for unregistered subcontractors or those who cannot be verified. The deduction is applied to the labour element of the payment — materials costs are excluded.
You claim CIS deductions as a credit against your Self Assessment tax bill. When you file your annual tax return, HMRC offsets the total CIS deducted during the year against your Income Tax and National Insurance owed. If CIS deductions exceed your total tax bill — which is common if your profits are low — HMRC will refund the difference, usually within a few weeks of filing.
Gross payment status means your contractor pays you the full amount with no CIS deduction. You then manage your own tax payments via Self Assessment. To qualify, you must pass HMRC's compliance test (up-to-date tax returns and payments), a business test, and a turnover test (minimum £30,000 net turnover per year for sole traders; £100,000 for companies). You apply through your Government Gateway account.
Yes. CIS is applied only to the labour element of the payment, not materials. If your invoice includes materials you have purchased and recharged, the contractor should deduct CIS only from the labour portion. To avoid disputes, always itemise labour and materials separately on your invoices. HMRC can investigate if materials appear inflated to reduce CIS deductions.
Yes. CIS subcontractors must register for Self Assessment and file an annual tax return, even if all their tax has been covered by CIS deductions. Your SA return is how HMRC reconciles the tax actually owed against what was deducted via CIS, and issues any refund. If you are also a sole trader with other income, this is all included in the same Self Assessment return.
If a contractor deducts at 30% instead of 20% (because you were not yet verified), you can recover the excess through your Self Assessment return. You cannot ask the contractor to correct past deductions — the reconciliation happens at the end of the tax year via HMRC. To avoid being taxed at 30%, register as a CIS subcontractor with HMRC before your first payment.
CIS operates within the standard UK tax year: 6 April to 5 April. Contractors must submit monthly CIS returns by the 19th of each month. As a subcontractor, your key deadline is the Self Assessment filing deadline: 31 January online (31 October for paper). Any tax owed after CIS credits must be paid by 31 January. Refunds of excess CIS deductions are processed after filing.
Written and reviewed by the UKCalc Editorial Team. UKCalc’s calculators and analysis are built and maintained using verified statutory data and official sources. Published by Animateed Limited. About UKCalc · Editorial policy · Methodology
Last reviewed: 9 August 2026 · Rates: 2026/27 tax year unless stated otherwise.
Rates, assumptions and sources
CIS deduction rates and the underlying tax figures. Official figures last checked on 2 September 2026.
Official figures this calculator applies
CIS deduction rates — 20% for subcontractors registered with the scheme, 30% for those not registered, and 0% where the subcontractor holds gross payment status. GOV.UK: CIS — make deductions and pay subcontractors
Income tax 2026/27 — personal allowance £12,570; 20% to £50,270; 40% to £125,140; 45% above. The allowance tapers by £1 for every £2 of income over £100,000. GOV.UK: Income Tax rates and Personal Allowances
CIS deductions are advance payments towards your income tax and Class 4 National Insurance — not a separate tax. The calculator shows the deduction taken at source and the balance likely to be owed or refunded at self-assessment.
Deductions apply to the labour element only. Materials, VAT, CIS-registered plant hire and certain other costs are excluded from the deduction base.
Assumes construction work is your only income for the year.
Why refunds are common. A 20% deduction is taken from labour payments regardless of your personal allowance, so subcontractors earning near the allowance often overpay through the year and reclaim at self-assessment.