CIS Deduction Calculator UK 2025/26
Calculate CIS deductions instantly — 20% registered, 30% unregistered, or 0% gross status. Materials excluded automatically.
Last updated: March 2026 | HMRC CIS 2025/26 rates
CIS Calculator 2025/26
Enter the gross payment and subcontractor CIS status. If materials are included in the invoice, enter the cost to exclude them from the deduction.
Monthly & Annual Projections
What is CIS and Who Does It Apply To?
The Construction Industry Scheme (CIS) is a system operated by HMRC under which contractors in the construction sector must deduct money from payments to subcontractors and pay those deductions directly to HMRC. The withheld amounts count as advance payments towards the subcontractor's income tax and National Insurance obligations.
CIS applies to anyone carrying out construction operations in the UK, which includes:
- Building, alteration, dismantling, or demolition of structures
- Installation of heating, lighting, power, water, and ventilation systems
- Cleaning buildings in the course of construction
- Civil engineering work, site preparation, and groundwork
- Painting and decorating (as part of construction work)
- Making, fixing, or removing scaffolding
CIS does NOT apply to: architecture and surveying, carpet fitting (not fixed), scaffolding hire (without labour), paid employees (PAYE applies instead), or manufacturing off-site materials not for a specific contract.
CIS Deduction Rates 2025/26
| Status | CIS Rate | Who Qualifies | Action Required |
|---|---|---|---|
| Gross Payment Status | 0% | Businesses approved by HMRC for gross payment | Apply to HMRC — must pass turnover, compliance, and business tests |
| Registered Subcontractor | 20% | Subcontractor registered with HMRC under CIS | Register via HMRC online or call 0300 200 3210 |
| Unregistered Subcontractor | 30% | Subcontractor not registered with HMRC, or HMRC cannot verify | Register immediately — higher deduction until registered |
How to Register for Gross Payment Status
Gross payment status allows a subcontractor to receive payments without any CIS deduction. To qualify, a business must pass three HMRC tests:
- Business test: The business must have been trading in construction for at least 12 months (or show that it will do so).
- Turnover test: Annual turnover from construction activities must be at least £30,000 (sole trader), £30,000 per partner (partnership), or £100,000 for a company. Net of VAT and materials.
- Compliance test: All HMRC returns (Self Assessment, PAYE, Corporation Tax, VAT, CIS monthly returns) must have been filed and paid on time in the past 12 months. Even minor late filings can result in rejection.
Gross payment status is reviewed annually. HMRC can withdraw it at any time if a business fails the compliance test. Apply via the HMRC CIS helpline (0300 200 3210) or through your HMRC online account.
Contractor Responsibilities Under CIS
If you are a contractor (paying subcontractors for construction work), your CIS obligations include:
- Register as a contractor with HMRC before taking on any subcontractors
- Verify every subcontractor with HMRC before the first payment — do not rely on the subcontractor telling you their status
- Deduct the correct rate from the labour element of each payment
- Pay deductions to HMRC by the 19th of the following month (or 22nd for electronic payment)
- File a CIS Monthly Return (even if nil) by the 19th of each month, listing every subcontractor paid
- Give payment and deduction statements to subcontractors within 14 days of the end of each tax month
- Keep records for at least 3 years after the end of the tax year to which they relate
Subcontractor Responsibilities Under CIS
If you are a subcontractor receiving CIS-deducted payments:
- Register with HMRC under CIS to get the 20% rate (rather than 30%)
- Collect and keep CIS payment and deduction statements from every contractor who pays you
- Declare all CIS income on your Self Assessment tax return (sole traders) or Corporation Tax return (limited companies)
- Offset CIS deductions against your income tax, NI, and Corporation Tax bill — HMRC will refund any excess
- Apply for gross payment status once you meet the qualifying criteria
CIS Monthly Return Deadlines
| Tax Month End | CIS Return Filing Deadline | Payment to HMRC Deadline |
|---|---|---|
| 5th of each month | 19th of the same month | 19th (paper) / 22nd (electronic) |
| e.g. 5 April 2025 | 19 April 2025 | 19/22 April 2025 |
| e.g. 5 May 2025 | 19 May 2025 | 19/22 May 2025 |
Penalties for late CIS returns: £100 for the first day late, rising to £200 per month after 2 months, and up to £3,000 for returns more than 12 months late. Even nil returns must be filed on time.
Frequently Asked Questions
CIS Rates at a Glance — 2025/26
| Subcontractor Status | Deduction Rate | Applies to | Example (£5,000 labour) |
|---|---|---|---|
| Gross Payment Status | 0% | HMRC-approved businesses | £0 deducted / £5,000 paid |
| Registered (Standard) | 20% | CIS-registered subcontractors | £1,000 deducted / £4,000 paid |
| Unregistered (Higher) | 30% | Not registered / unverifiable | £1,500 deducted / £3,500 paid |
Materials: CIS deductions apply only to the labour element. Deduct materials cost from the gross payment first, then apply the rate. Always verify subcontractor status via HMRC before the first payment. Source: HMRC CIS Guidance
Expert Reviewed — This calculator uses confirmed 2025/26 HMRC CIS deduction rates. Reviewed by our accountancy team. Last verified: March 2026. For complex CIS situations (reverse charge VAT, deemed direct employees), consult a qualified accountant.
Last updated: March 2026 | HMRC CIS 2025/26 rates confirmed
💡 CIS Tips for Contractors and Subcontractors ▼
- Contractors: Always verify subcontractors with HMRC — never assume the rate based on what the subcontractor tells you
- Subcontractors: Register for CIS immediately to get the 20% rate instead of 30% — it's free and quick via HMRC online
- Materials: Always separate materials and labour on your invoices to avoid over-deduction
- Monthly returns: File on time even if nil — the £100+ penalty applies regardless
- Gross status: Apply as soon as you meet the criteria — saves significant cash flow
📋 Understanding Your Results ▼
- CIS Deduction — the amount the contractor holds back and pays to HMRC
- Net Payment — what the subcontractor actually receives (gross minus deduction)
- Labour Element — the gross payment minus any materials cost; this is what CIS is applied to
- Monthly/Annual projection — based on this payment repeating each month x 12