Enter the gross payment and materials — see the labour element, the 20% or 30% deduction, and the net payment instantly. Then turn it into the statement you owe your subcontractor in one click.
Materials come off first — CIS applies to labour only — always split out materials the subcontractor paid for.
Ex-VAT figures — CIS is calculated on payments excluding VAT.
20% vs 30% — 20% for CIS-registered subs; 30% if HMRC verification returned 'unmatched' — and you must show the verification number on the statement.
Gross status subs — some subcontractors qualify for 0% deduction — you still issue statements and file returns.
Frequently asked questions
How is the CIS deduction calculated?
Gross payment (excluding VAT) minus the cost of materials = the labour element. The deduction is 20% (registered) or 30% (unverified) of the labour element. Materials are never subject to deduction — that's why itemising them properly matters.
Do materials really reduce the deduction?
Yes. If you pay a subcontractor £2,400 of which £400 is materials they purchased, the deduction applies to £2,000 only. At 20%, that's £400 deducted and £2,000 net — instead of £480 if you'd forgotten to split out materials.
Is VAT included in CIS calculations?
No — CIS is calculated on payments excluding VAT. Enter the ex-VAT figures in the calculator.