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For subcontractors · Construction Industry Scheme · 2026/27
The short answer
CIS is 20% of the labour part of your invoice (30% if you're not registered). Materials, plant hire and VAT are taken off first. On a £2,000 invoice with £500 of materials, £300 is deducted and you're paid £1,700. Deductions count towards your tax bill, so many subbies get money back.
Calculators
Estimated CIS refund
£2,948
Profit £32,000 · Income Tax £3,886 · Class 4 NI £1,166 · CIS already paid £8,000
Estimate only, not tax advice. Uses 2026/27 rates for England, Wales and Northern Ireland and assumes no other income (such as a job, pension or rent), no student loan and no payments on account.
How it works
Keep receipts for materials. If you can't show them, the contractor has to estimate the cost. New to CIS? See how to register. Rules from GOV.UK.
Refunds
Sole traders: the deductions are advance payments towards your Income Tax and National Insurance. Add up your monthly payment and deduction statements, enter the total on your Self Assessment return, and HMRC refunds anything you've overpaid. You can file from 6 April, straight after the tax year ends.
Limited companies: set the CIS your company suffered against the PAYE and National Insurance it owes each month. Any amount left over at the end of the year can be reclaimed from HMRC.
Want your whole tax bill, not just the refund? Use the self-employed tax calculator. Wondering whether to incorporate? Compare take-home pay with our sole trader vs limited company calculator.
General information, not tax advice. Refund estimates use 2026/27 Income Tax and Class 4 National Insurance rates for England, Wales and Northern Ireland. See also what UK trades earn.