Construction (CIS) · 2026/27 tax year
CIS deduction calculator UK 2026/27
Work out how much a contractor should withhold under the Construction Industry Scheme (CIS) from a payment to a subcontractor (20% or 30% on the labour portion excluding VAT).
CIS withheld: £1,000
Net paid to subcontractor: £4,000
Understanding your results
CIS cash flow is backwards compared to normal invoicing: you receive less today so HMRC holds a deposit against tomorrow’s Self Assessment. That can feel punitive if you forget to offset it on your return.
Materials-only invoices and reverse-charge VAT jobs need careful line separation — contractors who mis-split labour and materials create mismatch penalties later.
Gross payment status is a privilege with compliance strings. If you lose verification, deductions jump to thirty percent overnight and your working capital changes the same week.
Keep CIS statements alongside bank feeds; reconciling each month prevents January surprises when your accountant asks for missing months.
Construction disputes often start at payment application wording — align your CIS statement descriptions with what the contract calls “value” for the month.
Disclaimer: This is a guidance estimate based on the 2026/27 tax year. It is not personal tax advice — consult an accountant or HMRC for your specific circumstances.
About this calculator
CIS deductions are sent to HMRC as advance payments toward the subcontractor’s tax and NI. They are not an extra tax on top — they reduce the eventual Self Assessment bill.
Enter the CIS gross amount (usually net of VAT on your invoice). If materials are paid gross, they are typically listed separately on the CIS statement; this field should match what HMRC expects on the deduction statement.
Gross payment status and joint ventures have extra rules. If you are unsure whether CIS applies, check GOV.UK or your accountant before deducting.
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