CIS calculator for subcontractors

Take your invoice total before VAT, knock off the materials you paid for yourself, then take your CIS rate from what is left. On a £600 job with £240 of materials at 20%, the deduction is 20% of £360, which is £72, so you are paid £528. Those figures are HMRC's own, from the CIS 340 guide.

No. CIS is only taken from the labour part of a payment. Materials you bought directly for the job come off first, along with consumables, plant you hired in from someone else and fuel used on the job (but not fuel for travelling). Your contractor can ask for receipts, and if you have none they will estimate the cost.

The 20% rate applies when you are registered for CIS and the contractor can verify you with HMRC. If you are not registered, or the details you gave do not match your registration exactly, the contractor has to take 30%. Registering and giving the contractor your exact UTR and business name usually sorts it.

No. VAT is left out of the CIS sum altogether. If you are VAT-registered and charge VAT, it is paid to you on top of the net amount. If you are not VAT-registered, the VAT you paid when buying materials counts as part of your materials cost.

If the contractor takes a CITB levy off your payment, it comes off the gross amount before the CIS deduction is worked out. HMRC’s worked case: a £1,000 contract with a £7 levy has a gross amount of £993. Use the "CITB levy or VAT" option in the calculator to include it.

Yes. Travel, fuel for travelling and subsistence paid to you stay in the gross amount, so the deduction is taken from them too. Only fuel used in the work itself counts alongside materials.

With gross payment status the contractor pays you in full, at 0%, and you pay your tax at the end of the year. To qualify, HMRC looks at your last 12 months' turnover, ignoring VAT and materials: at least £30,000 as a sole trader, or £30,000 per partner or director (or £100,000 for the whole business). You also need to have paid tax on time and run the business through a bank account.

Deductions are advance payments towards your tax and National Insurance, not extra tax. Sole traders and partners put them on their Self Assessment return, and HMRC takes them off the bill or refunds the difference. Limited companies set them against their PAYE bill through the Employer Payment Summary. Keep every monthly statement your contractor gives you.

It follows HMRC's published rules as of 7 November 2026 and matches the worked figures in HMRC's CIS 340 guide. It is still an estimate, not tax advice: your contractor's statement is the figure that counts, and an accountant can check anything unusual.