CIS Deduction Calculator
Work out the Construction Industry Scheme deduction on a subcontractor invoice. Pick your registration status, enter the labour and materials breakdown, and see the deduction, net pay, and what HMRC keeps.
CIS rates and materials carve-out from gov.uk/what-you-must-do-as-a-cis-subcontractor. Reverse charge VAT may apply for B2B construction services — check with your accountant.
Snap your subcontractor invoices, keep CIS records straight
PocketReceipt scans your invoices, separates labour from materials, and exports HMRC-aligned summaries — so the labour figure you put through CIS is always backed by evidence.
How CIS deductions work
Under the Construction Industry Scheme, contractors deduct money from a subcontractor's payment and pass it to HMRC as advance tax and National Insurance. Three rates:
- 20% — standard rate for verified, registered subcontractors
- 30% — higher rate for unverified or unregistered subcontractors
- 0% — Gross Payment Status (GPS) for subcontractors who pass HMRC's turnover, business and compliance tests
The deduction applies to labour only. Materials genuinely supplied by the subcontractor are excluded — but the breakdown must be reasonable, not inflated. HMRC challenges suspicious materials splits.
What counts as "materials"
Per HMRC guidance, materials means physical items supplied for the job: building materials, fuel for plant, equipment hire, consumables. It does NOT include the subcontractor's own travel, tools, training, mobile phone, or accommodation — those stay in the labour element and have CIS deducted.
VAT and the CIS deduction
VAT is charged separately on the invoice and is not subject to CIS deduction. From 1 March 2021, the domestic reverse charge for construction means VAT-registered subcontractors invoicing other VAT-registered businesses do NOT add VAT — the contractor accounts for it themselves. The calculator above lets you toggle between standard 20% VAT and reverse-charge (zero VAT shown) using the VAT field.
How to claim back over-deducted CIS
For sole traders, the deductions sit as advance tax payments. They're set off against your Self Assessment tax bill at the end of the tax year — and if they exceed your liability, HMRC refunds the difference. Keep every CIS payment and deduction statement (CIS25 for sole traders) safe — the dashboard / PocketReceipt can store these alongside your scanned invoices.