Calculate Construction Industry Scheme deductions instantly. Find out your net payment as a subcontractor with ease.
CALCULATOR DETAILS
Calculation Summary
Labour Amount
0.00
Gross minus Materials
CIS Deduction
0.00
Tax Deduction
Net Payment
0.00
To Subcontractor
The Construction Industry Scheme (CIS) is a tax withholding system operated by HMRC that applies to the construction industry. It requires contractors to deduct tax from payments made to subcontractors. The amount deducted depends on whether the subcontractor is registered for CIS and their status. This scheme applies to all payments for construction services, including labour and materials.
Applies when the subcontractor has a valid CIS registration with HMRC and a valid Unique Taxpayer Reference (UTR). This is the standard rate for registered subcontractors.
Applies when the subcontractor is not registered for CIS or does not have valid registration documentation. This is a higher rate to protect HMRC revenue.
Applies to subcontractors who have been given Gross Payment Status by HMRC. These are typically larger, more established companies with excellent compliance records. No deduction is required.
Contractors must register for CIS if they:
Subcontractor registration is optional but recommended to:
CIS and VAT Reverse Charge are separate rules that both apply to construction services in the UK. Here's how they differ:
| Aspect | CIS | VAT Reverse Charge |
|---|---|---|
| Purpose | Tax withholding on labour | VAT liability transfer |
| Applies to | Construction labour | Qualifying construction supplies |
| Who collects | Contractor withholds | Customer pays direct to HMRC |
| Can coexist | Yes, both rules can apply simultaneously to the same invoice | |
The Construction Industry Scheme (CIS) is a tax withholding system used in the construction industry. Contractors are required to deduct tax from payments made to subcontractors. The deduction rate depends on the subcontractor's registration status: 20% for registered, 30% for unregistered, or 0% for those with gross payment status.
Registering for CIS as a subcontractor is optional but highly recommended. By registering, you reduce the CIS deduction from 30% to 20%, saving you money on every payment. You also improve your credibility with contractors and simplify your tax reporting. The registration is free and can be completed online through HMRC.
CIS registration with HMRC can take 4-8 weeks. During this time, the 30% deduction rate still applies. Once you receive your registration confirmation and UTR number, you can provide these to contractors and the 20% rate will apply to future payments.
CIS deductions are treated as advance tax payments and can be claimed back against your tax liability through self-assessment. If you have overpaid or have insufficient tax liability, you can claim a refund from HMRC.
Gross Payment Status is granted by HMRC to large, well-established subcontractors with excellent compliance records. It exempts them from CIS deductions entirely, allowing them to receive the full gross payment. This status is not available to most small businesses and requires specific criteria to be met.