CIS Monthly Return (subcontractor deduction)
Work out the Construction Industry Scheme deduction a contractor must withhold from a subcontractor's payment, based on their verified CIS status: gross, net (20%) or unverified (30%).
Gegevens gecontroleerd · juli 2026
Are materials always excluded from the CIS deduction?
Yes, provided the subcontractor's invoice separately identifies a genuine materials cost — the deduction only ever applies to the labour element.
Bron: HMRC — Construction Industry Scheme (CIS): guide for contractors and subcontractors (gov.uk/what-you-must-do-as-a-cis-contractor), 2025/26. · bijgewerkt 2026
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Alles over CIS Monthly Return (subcontractor deduction)
📋Overzicht+
Under CIS, contractors deduct tax at source from payments to subcontractors before passing on the net amount. Deductions apply only to the labour element — materials the subcontractor genuinely incurred are excluded. The deduction rate depends on HMRC's verification: 0% for subcontractors registered for gross payment, 20% for those registered net, and 30% for anyone HMRC cannot verify.
💡 Best practices
- Always verify a new subcontractor with HMRC before the first payment — skipping this defaults you to the 30% unverified rate.
- Keep materials invoices on file — HMRC can challenge a materials deduction that isn't evidenced.
- Deductions withheld are advance payments of the subcontractor's own tax and NIC, reclaimable via their Self Assessment or (for limited companies) against PAYE liabilities.
🔢 Concreet voorbeeld
£5,000 gross payment with £1,000 materials, subcontractor verified net-standard: £4,000 labour element, 20% deduction = £800, leaving £4,200 net payment.
📖Handleiding+
Zo gebruikt u deze rekentool
- 1
Enter the gross payment due to the subcontractor for the work.
- 2
Enter the materials cost included in that payment — CIS only applies to labour.
- 3
Select the subcontractor's verified CIS status: gross, net-standard or unverified.
- 4
Read the labour element, deduction rate and net payment due.
📚Woordenlijst+
- Labour element
- The part of a subcontractor's invoice covering their work, as opposed to materials — CIS deductions apply only to this portion.
- Verification
- The process of checking a subcontractor's CIS status with HMRC before the first payment, which determines whether 0%, 20% or 30% is deducted.
ℹ️Bronnen & updates+
Laatste gegevensupdate
7 juli 2026
Bronnen en referenties
HMRC — Construction Industry Scheme (CIS): guide for contractors and subcontractors (gov.uk/what-you-must-do-as-a-cis-contractor), 2025/26.
De gegevens van deze rekentool worden regelmatig bijgewerkt volgens de laatste officiële tarieven. Raadpleeg bij twijfel de bovenstaande officiële bronnen.
FAQ — CIS Monthly Return (subcontractor deduction)
Are materials always excluded from the CIS deduction?+
Yes, provided the subcontractor's invoice separately identifies a genuine materials cost — the deduction only ever applies to the labour element.
Can a subcontractor reclaim CIS deductions?+
Yes — deductions are treated as payments on account of the subcontractor's income tax and Class 4 NIC (or offset against a limited company's PAYE bill), reconciled via Self Assessment or the employer's PAYE return.