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For subcontractors · Construction Industry Scheme · 2026/27

CIS calculator: deductions and tax refund

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

Work out your CIS deduction and refund

CIS deduction on an invoice

Your CIS status
Labour the deduction applies to
£1,200.00
CIS deducted
£240.00
You're paid (before VAT)
£1,260.00

CIS tax refund estimate (2026/27, sole traders)

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

How a CIS deduction is calculated

  1. Start with the total (gross) amount on your invoice.
  2. Take away what you paid for: VAT, materials, equipment now unusable (“consumable stores”), fuel except for travelling, plant hire for the job, and manufacturing or prefabricating materials.
  3. Deduct the CIS rate HMRC gives the contractor: 20%, 30% or 0%.
  4. The contractor pays you the rest and pays the deduction to HMRC for you.

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

How to claim a CIS tax refund

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.

CIS questions answered

Start with the invoice total, take off VAT and the materials, plant hire, fuel (except for travel) and consumables the subcontractor paid for, then deduct 20% from what's left (30% if not registered, 0% with gross payment status). On a £2,000 invoice with £500 of materials, the deduction is £300.

No. Contractors should not take CIS from the cost of materials the subcontractor bought for the job, and they can ask for receipts. If there is no evidence, the contractor estimates the materials cost. CIS is also never taken from VAT.

20% for subcontractors registered with HMRC for CIS, 30% for those who are not registered, and 0% for subcontractors with gross payment status.

Sole traders claim through their Self Assessment tax return: enter the CIS deducted from your payment and deduction statements, and HMRC refunds any amount paid over your Income Tax and National Insurance bill. You can file as soon as the tax year ends on 5 April. Limited companies instead set CIS deductions against the PAYE and National Insurance they owe each month.

It depends on your profit, not your turnover. For example, a sole trader with £40,000 turnover, £8,000 of expenses and £8,000 of CIS deducted would owe about £5,052 in tax and National Insurance for 2026/27, so could expect a refund of about £2,948. Claiming all your expenses is the biggest factor.

Gross payment status means contractors pay you in full with no CIS deducted, and you pay your tax yourself later. You have to apply to HMRC and pass business, turnover and compliance tests, and HMRC can remove it if you file or pay late.

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.