Free tool · one invoice
CIS deduction calculator
The contractor does not keep the deduction. They pay it to HMRC in your name. I've spent over 20 years in UK construction, and I still check the labour figure before I argue with a statement.
Put in the invoice, the materials, and any VAT charged on that invoice. Pick 20% if you are registered and the contractor can verify you, 30% if you are not registered or they cannot verify you, or 0% if you have gross payment status. The steps are the ones on HMRC's page for contractors (opens in a new tab) and in CIS340 (opens in a new tab), which I read on 18 October 2026. This is an estimate of the deduction on one invoice, not tax advice, and it does not verify you. The figures stay in the browser.
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What is on the sheet is on the Self Assessment checklist.
What the percentage comes off
The contractor page (opens in a new tab) says start with the gross amount of the invoice, then take off VAT, consumable stores, fuel used except for travelling, plant hired for this job, manufacturing or prefabricating materials, and materials the subcontractor paid for directly. The percentage comes off what is left. The same exclusions are on the subcontractor page about getting paid (opens in a new tab). Travelling fuel is not taken off before the percentage. Do not put diesel for the van in the materials box.
CIS340 says the deduction rates can change, and it points to that contractor page for the current rates. On 18 October 2026 those rates were 20% for a registered subcontractor, 30% where HMRC cannot verify them, and 0% for gross payment status. Appendix D of CIS340 works examples at 20% and 30%. A labour-only payment of £200 at 20% is a £40 deduction and a £160 net payment. Where the invoice is £720 including £120 of VAT, and materials excluding VAT are £200, the deduction at 20% is £80 and the net payment is £640.
If the subcontractor is not registered for VAT, CIS340 says include the VAT they paid on materials in the materials cost. If they are registered, use the materials cost without that VAT. The VAT box on this page is the VAT charged on the invoice, not the VAT on the materials receipt.
Domestic reverse charge
On many jobs between VAT-registered construction businesses, the domestic reverse charge means the invoice shows no VAT and the customer accounts for it. Leave the VAT box at 0. Reverse charge VAT is not a CIS deduction. Both can apply to the same invoice. When the reverse charge applies, and the wording the invoice needs, is in the VAT reverse charge guide. HMRC's technical guide is VAT domestic reverse charge for building and construction services (opens in a new tab).
Where the deduction goes next
The rate, the statement, and gross payment status are in the CIS deductions guide. Claiming the difference back, on the Self Assessment return for a sole trader or through payroll for a limited company, is in the CIS tax refund guide. The tax on the year's profit, after those deductions, is the self-employed tax calculator. Other free tools are on the tools page.
Common questions
Does this tell me which CIS rate the contractor has to use?
No. HMRC tells the contractor the rate when they verify you: 20% if you are registered and they can verify you, 30% if you are not registered or they cannot verify you, and 0% if you have gross payment status. This page only does the sum for the rate you pick.
What is the percentage taken from?
The invoice total, minus VAT charged on that invoice, minus materials the subcontractor paid for directly, consumable stores, fuel except for travelling, plant hire, and manufacturing or prefabricating materials. Travelling costs stay in the amount the percentage comes off. That is the order on HMRC's contractor page and in CIS340.
What if the domestic reverse charge applies?
The invoice usually shows no VAT, because the customer accounts for it. Leave the VAT box at 0. Reverse charge VAT is not a CIS deduction. The reverse charge guide on this site says when it applies.
Does gross payment status mean I pay no tax?
No. It means the contractor pays the invoice without a CIS deduction. You still pay your own tax. For a sole trader that is through Self Assessment.
How do I get a CIS deduction back?
A sole trader or partner records the pay before deductions as income, and the deductions as CIS deductions, on the Self Assessment return. HMRC takes the deductions off the tax. A limited company uses a different route. The CIS tax refund guide on this site sets both out.
Should the materials figure include VAT?
CIS340 says that if the subcontractor is not registered for VAT, include the VAT they paid on materials in the materials cost. If they are registered for VAT, use the materials cost without that VAT. The VAT box on this page is the VAT charged on the invoice, which is a separate figure.