CIS is taken off labour only, never materials, at 20% if you're registered, 30% if you're not, or 0% with gross payment status. Check any invoice below, or let the DayGraft app do it on every day you log.
CIS comes off labour only. Nothing you type leaves this page.
Under the Construction Industry Scheme, a contractor takes a percentage off the labour part of each payment to a subcontractor and pays it to HMRC. It's an advance payment towards your own tax and National Insurance, not an extra tax.
| Your CIS status | Deduction |
|---|---|
| Registered subcontractor | 20% |
| Not registered with HMRC | 30% |
| Gross payment status | 0% |
Five days at £220 is £1,100 labour, plus £84.60 of materials you supplied. At 20%, the CIS deduction is £220.00 (20% of £1,100 only). You're paid £964.60. On 30%, the deduction would be £330.00, and you'd get £854.60.
At the end of the tax year, everything deducted under CIS is set against your tax bill on your Self Assessment return. Because CIS ignores your personal allowance and expenses, most subcontractors have more taken off than they owe. See roughly how much you could get back.
Sources (last checked 23 October 2026): What you must do as a CIS subcontractor — GOV.UK · CIS guide for contractors and subcontractors (CIS340) — GOV.UK
Each day entry splits labour from materials, so CIS is only applied to the part HMRC says it should be.
Choose your rate in Settings and every daily total, weekly statement and tax-year figure uses it from then on.
The statement you send your contractor breaks out labour, materials, the CIS deduction and the net amount payable, so both sides can check it.
Settings shows total labour and total CIS deducted for the current tax year, kept up to date as you log, ready for your Self Assessment or your accountant.
If you're VAT-registered, set each contractor to standard VAT or the domestic reverse charge once. CIS is always worked out on labour excluding VAT.
The Construction Industry Scheme (CIS) makes contractors take tax off subcontractors' labour before paying them: 20% if you're registered, 30% if you're not, or nothing if you have gross payment status. It counts towards your tax bill for the year, so it isn't a final amount.
No. CIS only applies to the labour part of a payment. Materials you supplied, plant or equipment you hired for the job, and VAT are all left out before the deduction is worked out.
30% applies if you aren't registered with HMRC for CIS, or HMRC can't verify you. Registering drops it to 20%. On £40,000 of labour, that's £4,000 less taken off during the year.
Gross payment status means contractors pay you without taking any CIS off, and you pay all your tax yourself through Self Assessment. You have to apply to HMRC and pass tests on turnover and on paying your tax on time.
Before. CIS is calculated on the labour amount excluding VAT. Under the domestic reverse charge, you don't charge VAT to the contractor at all, and they account for it with HMRC instead.
Yes. Update it in Settings. New days, statements and the tax-year totals then use the new rate.
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