CIS calculator
Work out the Construction Industry Scheme deduction on a subcontractor's invoice, what to pay them and when HMRC needs the money.
Check the subcontractor's status with HMRC before you pay them. The rate HMRC gives you when you verify them is the one to use. Payment dates do not allow for bank holidays.
How the CIS deduction is worked out
HMRC's CIS 340 guide sets out two steps.
- Step 1. Start with the payment, leaving out VAT if the subcontractor is VAT registered.
- Step 2. Take off what the subcontractor actually paid for materials, consumable stores, fuel (except fuel for travelling), plant hire and manufacturing or prefabricating materials.
The deduction rate applies to what is left. You pay the subcontractor the invoice total less the deduction, and you pay the deduction to HMRC.
Worked example
A registered subcontractor invoices £1,800 before VAT. They spent £300 on materials for the job.
| Invoice before VAT | £1,800.00 |
| Less materials | £300.00 |
| Amount liable to deduction | £1,500.00 |
| CIS deduction at 20% | £300.00 |
| Pay the subcontractor | £1,500.00 |
What you can and cannot take off
| Item | Left out of the deduction? |
|---|---|
| VAT (VAT-registered subcontractor) | Yes |
| Materials the subcontractor paid for | Yes, but only what they paid. Any mark-up is not taken off. |
| Consumable stores | Yes |
| Plant hired from someone else, and its fuel | Yes |
| Fuel used for travelling | No |
| Travel and subsistence | No |
| Labour | No |
Only take off materials the subcontractor paid for directly. You can ask them for evidence of the cost. HMRC also says there is no allowance for plant the subcontractor owns, although fuel for it can still count.
Your deadlines as a contractor
- Tax months run from the 6th of one month to the 5th of the next.
- Send your monthly return to HMRC by the 19th after the tax month ends. A late return starts at a £100 penalty.
- Give each subcontractor a payment and deduction statement by the same date.
- Pay HMRC by the 22nd if you pay electronically, or by the 19th by post.
- If your monthly payments to HMRC average under £1,500, you may be able to pay quarterly.
Since 6 April 2026, mainstream contractors who pay no subcontractors in a month must send a nil return or tell HMRC they are inactive.
Common questions
What percentage is taken off under CIS?
20% if the subcontractor is registered for CIS, 30% if they are not registered or HMRC cannot identify them, and nothing if they have gross payment status.
Is the CIS deduction taken from materials?
No. The deduction is only taken from the part of the payment that is not the cost of materials the subcontractor paid for. Consumable stores, fuel (except fuel for travelling), plant hire and the cost of manufacturing or prefabricating materials are also left out.
Is the CIS deduction taken from VAT?
No. If the subcontractor is VAT registered, VAT is left out of the amount the deduction is worked out on.
Are travel and subsistence costs included?
Yes. HMRC says travel expenses, including fuel for travelling, and subsistence are part of the amount the deduction is taken from.
When do I pay CIS deductions to HMRC?
By the 22nd of the month after the tax month ends if you pay electronically, or by the 19th if you pay by post. Tax months run from the 6th to the 5th.
Related
- CIS status and insurance: what changes when you take on subcontractors
- New CIS fraud rules and gross payment status
- Subcontractor status check
Sources: HMRC, CIS 340 guide for contractors and subcontractors (updated 27 August 2026); GOV.UK, Make deductions and pay subcontractors; GOV.UK, Pay deductions to HMRC. Checked 12 November 2026.
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