Construction Industry Scheme (CIS) Guide
Understand UK CIS rules, deduction rates, and compliance obligations. Use our free estimator to calculate exact deductions for contractors and subcontractors.
Estimate Your CIS Deductions
Enter the invoice amount and the subcontractor’s CIS registration status to instantly calculate the required HMRC deduction and the final net payment.
Payment Details
Enter the construction payment figures to calculate CIS deductions
Deduction Evaluation
Calculated CIS deductions and net payments
CIS Deduction Rates Explained
HMRC mandates specific deduction rates based on the subcontractor’s registration and compliance status.
| CIS Status | Deduction Rate | Description | Best For |
|---|---|---|---|
| Gross Payment Status | 0% | No tax is deducted. Subcontractor handles their own tax via Self Assessment. | Established businesses meeting HMRC turnover & compliance tests. |
| Registered Subcontractor | 20% | Standard rate. Deductions count as advance payments toward annual tax liability. | Most sole traders and limited companies registered with HMRC for CIS. |
| Unregistered / Unverified | 30% | Highest rate. Applied if the subcontractor cannot be verified by the contractor. | New or non-compliant subcontractors who have not registered with HMRC. |
CIS Rules & Compliance FAQ
Everything contractors and subcontractors need to know about the Construction Industry Scheme.
The Construction Industry Scheme (CIS) is a HMRC tax scheme that applies to most construction work in the UK. It requires contractors to deduct money from a subcontractor’s payments and pass it to HMRC. These deductions count as advance payments towards the subcontractor’s tax and National Insurance.
There are three CIS deduction rates: 0% for subcontractors with ‘Gross Payment Status’, 20% for subcontractors registered with HMRC under CIS, and 30% for unregistered or unverified subcontractors.
To qualify for Gross Payment Status, a subcontractor must run their business in the UK, have a UK bank account, and meet HMRC’s strict business, turnover, and compliance tests. This allows them to receive payments in full without CIS deductions.
If your total CIS deductions exceed your overall tax and National Insurance liability for the year, HMRC will refund the overpaid amount when you submit your Self Assessment tax return. Ensure you keep all CIS deduction statements provided by your contractors.