CIS Deduction Calculator
Work out the CIS deduction and what to pay, with VAT and qualifying costs treated separately.
LedgerKit provides estimates based on the information entered and the configured rates. Results do not constitute accounting, tax or legal advice. Check the latest official guidance or consult a qualified professional before acting on a calculation.
How this calculator works
Start with the full invoice amounts excluding VAT. Only labour and other assessable work form the CIS deduction base. Actual qualifying costs are added to the invoice but excluded from that base.
Normal VAT is added to the payment. Under domestic reverse charge, the notional VAT is displayed for the customer to account for, but it is not paid to the subcontractor.
Worked example
£1,000 assessable work + £200 materials + £240 VAT − £200 CIS = £1,240 payable. With domestic reverse charge, the payment is £1,000; the customer accounts for the £240 VAT.
Frequently asked questions
Which CIS rate should I use?
Use the rate HMRC provides when the contractor verifies the subcontractor. Registration alone is not a substitute for checking that response.
What costs qualify for exclusion?
Actual qualifying materials, consumables, non-travel fuel, third-party plant hire and manufacture/prefabrication costs may qualify. Travel, subsistence, material markup and notional hire of owned equipment do not. Confirm other exclusions against CIS 340.
What if the subcontractor is not VAT registered?
Choose no VAT charged. Qualifying materials costs may include VAT the subcontractor actually paid and cannot recover. Do not add that purchase VAT again as invoice VAT.
Does the reverse charge always apply to construction?
No. Eligibility depends on the supply and the parties, including end-user and VAT-registration conditions. Check HMRC’s reverse-charge guidance.