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CIS: 20% or 30%, and which should you be on?

If you're registered for CIS and the contractor can match you to your registration with HMRC, they take 20%. If you're not registered, or they can't match you, they take 30%. With gross payment status they take nothing and you pay your own tax at the end of the year. Every deduction counts towards your tax and National Insurance bill.

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How to check your rate

  • Your monthly statement

    Your contractor must give you a payment and deduction statement within 14 days of the end of each tax month. Divide the deduction by the amount it was taken from: 20% or 30% shows the rate they used.

  • The details you gave

    Give each contractor the exact Unique Taxpayer Reference and business name you registered with. If they can't match your details, it changes how much you're paid.

  • Materials and VAT

    No CIS deduction comes off the VAT on your invoice, materials you paid for, plant hired for the job or consumables used up on it. Keep the receipts: without them the contractor estimates your materials.

Questions people ask

I'm registered but they're taking 30%. What now?

Speak to the contractor. Give them your exact registered name and UTR so they can check you with HMRC again. gov.uk says that if you think the figures on your statement are wrong, raise it with your contractor.

Do I get the extra back?

As a sole trader or partner, your Self Assessment return records your pay before deductions and the CIS deductions taken. HMRC takes the deductions off the tax you owe and pays back anything over. Keep every statement.

How do I get gross payment status?

You apply to HMRC and show you've paid tax and NI on time, you do construction work in the UK, your business runs through a bank account, and your turnover for the last 12 months, leaving out VAT and materials, was at least £30,000 as a sole trader.

I'm not registered. Should I be?

gov.uk says to register if you work for a contractor as a sole trader, a partner or through your own limited company. Until you do, contractors must take 30%. Employees don't register.

Where these facts come from

This is a check against published rules, not legal or tax advice. If you're in a dispute, ACAS, a union or an adviser can act for you.

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