How it is calculated
GOV.UK's rule for contractors: start with the invoice total, take away VAT and what the subcontractor paid for materials, plant hire, fuel (except for travel), consumables and manufactured or prefabricated items, then apply the rate to what is left — the labour. deduction = labour × rate ÷ 100
VAT, if the subcontractor is registered, is charged on the whole invoice (labour and materials). The CIS deduction never touches the VAT. paid = labour + materials + VAT − deduction
Worked example: labour £1,000 + materials £200 + VAT at 20% (£240) = invoice £1,440. CIS at 20% of the £1,000 labour = £200. The contractor pays the subcontractor £1,240 and sends £200 to HMRC.
VAT domestic reverse charge. Some construction services between VAT-registered businesses fall under HMRC's domestic reverse charge, which changes who accounts for the VAT. This calculator does not apply that rule — check HMRC's reverse-charge guidance if it may apply to the job.
Is CIS deducted from materials?
No. The contractor takes out the materials the subcontractor paid for, plant hire, fuel (except for travel), consumables and prefabricated items, and VAT, before working out the deduction. The deduction is on what is left — the labour.
Which CIS rate applies to me?
20% if you are registered for CIS as a subcontractor, 30% if you are not registered, 0% if HMRC has given you gross payment status.
Is the CIS deduction money I lose?
No. GOV.UK describes CIS deductions as advance payments towards the subcontractor's tax and National Insurance. They are set against what you owe when your tax is worked out.
Do I charge VAT on a CIS invoice?
If you are VAT registered, yes — on the full invoice, labour and materials — and CIS is never deducted from the VAT. Some construction work between VAT-registered businesses falls under the VAT domestic reverse charge; this calculator does not apply it.
Why is the payment I received less than my invoice?
The invoice shows labour + materials + VAT. The contractor pays that total minus the CIS deduction and gives you a payment and deduction statement for the difference, which counts towards your tax.
What GlideQuote does with this
GlideQuote makes UK invoices on your phone with labour and materials as separate lines and VAT on the full amount, so the contractor can see the labour figure the deduction applies to. Your logo and signature on the PDF, quotes that convert to invoices, deposits and stage payments for longer jobs.
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GOV.UK — What you must do as a CIS contractor: make deductions and pay subcontractors (20% / 30% / 0%; deduct after taking off VAT, materials, plant hire, fuel except travel, consumables, prefabrication):
gov.ukThis calculator shows the arithmetic of the published rates; it is not tax advice. For your own situation ask an accountant.
