Free tool

CIS deduction calculator

The deduction comes off your labour, not your materials. Put the two in separately, pick your rate, and you get the gross total and the net amount the contractor actually pays. No sign-up, nothing to install.

Calculator

Work out the deduction on a subcontractor invoice

Enter the figures excluding VAT. If the reverse charge applies, no VAT is charged on the invoice at all.

Labour£0.00
Materials£0.00
Gross total£0.00
CIS deduction£0.00
Net amount due£0.00

The contractor pays you the net figure and hands the deduction to HMRC against your tax. Your invoice still shows the gross total: the deduction reduces the cash, not the sale. This is general information, not tax advice.

The rule

Labour is deducted from. Materials are not.

Under the Construction Industry Scheme, a main contractor takes a slice of what they owe you and pays it to HMRC on your behalf. It counts towards your tax bill (it isn’t a cost), but it changes what lands in your bank.

The part people get wrong, and the reason invoices come back, is what the percentage applies to. It comes off the labour element only. The materials you bought for the job are never deducted from. Put a single figure on the invoice with no split and the contractor either deducts from all of it, leaving you short, or sends it back to be redone.

The three rates

  • 20% if you’re registered with HMRC under CIS
  • 30% if you’re not registered, or HMRC can’t verify you
  • 0% if you hold gross payment status

Where the reverse charge comes in

If you and the contractor are both VAT registered and the work falls under CIS, the VAT domestic reverse charge usually applies too. You charge no VAT and the invoice has to say so in the wording HMRC expects. That’s a separate rule from the deduction above, and they land on the same invoice.

Or let the invoice do it.

This calculator runs the same code Sendinvo uses on a real invoice. Set your rate once, tick the deduction, and it comes off the labour, prints the gross total and the net amount due, and adds the reverse-charge wording when it applies. Everything free for 30 days, no card needed.