Free tool
CIS deduction calculator
Work out the CIS deduction on a subcontractor's invoice, what to pay them and what goes to HMRC. Free, with no sign-up.
The subcontractor's total for the work, including any materials, but not VAT.
What the subcontractor actually paid for materials, consumables and plant hire. Leave at 0 for labour only.
This follows HMRC's published CIS rules as at November 2026. It is a guide, not tax advice. Check gov.uk or your accountant for your own situation.
What the deduction is taken from
CIS is deducted from the labour part of the payment only. Before working it out, take off:
- VAT
- materials and consumables the subcontractor bought for the job
- plant hire, and fuel for plant (but not fuel for travelling)
- the CITB levy, if it's passed on
Travel and subsistence you pay the subcontractor count as labour, so they are deducted from too.
Which rate
20% if the subcontractor is registered for CIS. 30% if they aren't registered or HMRC can't match them. 0% if they have gross payment status.
Verify every new subcontractor with HMRC before you pay them for the first time. HMRC gives you the rate and a verification number. You don't need to verify again if you've paid them in the current tax year or the two before it.
Monthly deadlines
- The CIS tax month runs from the 6th to the 5th.
- File the monthly return (CIS300) by the 19th.
- Pay the deductions to HMRC by the 22nd if you pay electronically.
- Give each subcontractor a payment and deduction statement within 14 days of the end of the tax month.
A late return costs £100 straight away, and the penalties go up if it stays late.
Worked example
A groundworker who is registered for CIS and VAT invoices £2,400 for a week, including £300 of materials. You're both VAT registered, so the reverse charge applies.
| Labour (£2,400 less £300 materials) | £2,100.00 |
| CIS deduction at 20% | £420.00 |
| VAT (reverse charge, you account for it) | £480.00 |
| Pay the subcontractor (£2,400 less £420) | £1,980.00 |
CIS questions
Quick answers.
What is the CIS deduction rate?
20% for subcontractors registered for CIS, 30% for those who aren't registered or can't be verified, and 0% for those with gross payment status. HMRC tells you which rate to use when you verify the subcontractor.
Is CIS deducted from VAT?
No. The deduction is worked out on the invoice before VAT, and only on the labour part.
Is CIS deducted from materials?
No. The cost of materials, consumables and plant hire that the subcontractor paid for the job is taken off before the deduction is worked out, as long as it's the real cost and is shown on the invoice. If you think the materials figure is inflated, you can ask for evidence.
When do contractors pay CIS deductions to HMRC?
The tax month runs from the 6th to the 5th. The monthly return is due by the 19th of the following month, and payment by the 22nd if you pay electronically.
Does the VAT reverse charge change the CIS deduction?
No. The deduction is still worked out on the labour before VAT. The reverse charge only changes who pays the VAT to HMRC: you account for it on your VAT return instead of paying it to the subcontractor, and you can usually reclaim it on the same return.
What does the subcontractor do with the deduction?
It's an advance payment of their tax. A sole trader claims it against their income tax and National Insurance on their tax return. A limited company offsets it against the PAYE and National Insurance it owes each month. That's why they need your payment and deduction statements.
Doing this every month?
ClockFence is a clock-in app for construction crews. The lads tap in on their own phones and the hours only count inside the boundary you draw round the site. Once you approve the week, subbies invoice you from the app with the CIS figure worked out. At month end, the CIS pack pulls the paid invoices into your CIS300 figures and a deduction statement for each subbie.
Free until 1 January 2027, no card. Firms that join before then keep £2.50 a person a month for life.