CIS rates explained
The Construction Industry Scheme makes contractors take tax off your labour before they pay you. Which rate applies depends entirely on your registration status with HMRC.
| Rate | When it applies | Note |
|---|---|---|
| 20% | Registered under CIS and verified by the contractor | Standard rate for most trades |
| 30% | Not registered, or HMRC cannot match your details | Register to drop to 20% |
| 0% | Gross Payment Status holders | Paid in full, tax settled at Self Assessment |
What CIS is never deducted from
- Materials you bought and paid for yourself
- Plant hire and fuel for plant that you paid for
- VAT charged on your invoice
- Consumable stores and manufacturing or prefabricating costs
Put these on separate invoice lines. If they are buried in one total, the contractor may deduct CIS on the lot and you wait until your tax return to get it back.
2026/27 thresholds used here
Personal allowance£12,570
Basic rate 20%£12,571 – £50,270
Higher rate 40%£50,271 – £125,140
Additional rate 45%Over £125,140
Class 4 NI 6%£12,570 – £50,270 profit
Class 4 NI 2%Profit above £50,270
VAT domestic reverse charge
For most construction services supplied to another VAT-registered business that is not the end user, you do not charge VAT — the contractor accounts for it. Your invoice states that the reverse charge applies. It changes nothing about CIS, which is still worked out on the labour element only.
Run the numbers on my invoice