Calculate Construction Industry Scheme deductions instantly. Enter the gross invoice amount and the calculator shows the labour split, deduction, and net payment. No signup required.
The Construction Industry Scheme (CIS) requires contractors to deduct money from payments to subcontractors and pass it to HMRC as advance income tax. The deductions count towards the subcontractor's tax bill at year end.
Three deduction rates apply depending on the subcontractor's status:
Crucially, CIS is calculated on the labour portion of the invoice only. Materials, plant hire, fuel and VAT are excluded. This is the most common mistake when new contractors first start using CIS.
The contractor pays the GBP 660 to HMRC. The subcontractor receives GBP 4,340 plus any VAT, and the GBP 660 counts as advance tax against their year-end liability.
CIS stands for Construction Industry Scheme. UK contractors deduct money from subcontractor payments and pass it to HMRC as advance tax. Three rates apply: 0%, 20% and 30%.
On the labour portion of the invoice only. Materials, plant hire, fuel and VAT are excluded from the calculation. Apply the verification rate (0%, 20% or 30%) to the labour figure.
No. Subtract materials, plant hire and fuel from the gross invoice before applying the CIS rate. The calculator above handles this automatically.
Apply to HMRC. You must pass the business test (genuine construction work), turnover test (typically over GBP 30,000), and compliance test (clean tax record).
Deduct at 30% rate. Verify their status with HMRC before each first payment. Once verified, HMRC tells you which rate applies.
No. Calculate CIS on the labour figure excluding VAT. Then apply VAT to the gross invoice (not on the CIS deducted amount).
No. CIS applies between contractors and subcontractors. PAYE applies between employers and employees. The same person can be on both schemes for different work.
Complys is the UK construction platform for tracking customers, jobs, RAMS, compliance and worker passports. CIS-aware invoicing on the roadmap. 90-day free trial with full features.