Short answer: start with the subcontractor's invoice before VAT. Take off the materials they bought for the job. Deduct 20% from what is left if they are registered for CIS, 30% if they are not, and nothing if they have gross payment status. The tax month runs from the 6th to the 5th. The return and the statements are due by the 19th, and the money by the 22nd if you pay electronically (GOV.UK).
Work out a CIS deduction
Result
| Amount liable to deduction | |
|---|---|
| CIS deduction | |
| Pay the subcontractor |
| Tax month | |
|---|---|
| Give the subcontractor a statement by | |
| Monthly return (CIS300) must reach HMRC by | |
| Pay HMRC by, electronically | |
| Pay HMRC by, by post |
| Total payment (excluding VAT) | |
|---|---|
| Direct cost of materials | |
| Amount deducted |
The calculator does the arithmetic. HMRC sets the rate for each subcontractor when you verify them. Nothing you type is stored.
Use it only for payments under a contract that is inside CIS. Repairing, servicing or maintaining a heating, water, drainage or ventilation system on its own is outside the scheme, but a contract with any construction work in it is inside for every payment (CIS340 para 2.21 and Appendix C). The building services guide explains where the line falls.
How the calculation works
- Start with the invoice before VAT. If the subcontractor is VAT registered, take the VAT off first. Travel and fuel costs you pay them stay in this figure: CIS340 says travelling expenses and subsistence "must be included in the gross amount of payment and the amount from which the deduction is made" (para 3.11).
- Take off what they paid for materials. That covers materials, consumable stores, fuel other than for travelling, plant hired from someone else, and the cost of making or prefabricating materials (CIS340 para 3.12). Only the subcontractor who bought the materials directly can have them taken off (para 3.13). If they own the plant, there is nothing to take off for it, though fuel for it still counts (para 3.14).
- Deduct the rate HMRC gave you. 20% for registered subcontractors, 30% for unregistered ones, 0% with gross payment status.
- Pay them the rest, plus any VAT you owe them on the invoice.
The calculator rounds the deduction down to the whole penny. HMRC's own example statement does the same: £4,865.64 at 20% is shown as £973.12 (CIS340, Appendix E).
The tax month and the dates that follow from it
A CIS tax month runs "from the sixth of one month to the fifth of the next month" (CIS340 para 3.15). Each date below is counted from the 5th, the last day of the tax month.
| What | When | Source |
|---|---|---|
| Payment and deduction statement to each subcontractor you deducted from | Within 14 days of the end of the tax month, so by the 19th | CIS340 para 3.15 |
| Monthly return (CIS300), listing every subcontractor you paid, including those paid gross | Must reach HMRC by the 19th | CIS340 para 4.2 |
| Pay the deductions to HMRC electronically | By the 22nd, or the banking day before if the 22nd is a weekend or bank holiday | CIS340 para 4.12 |
| Pay the deductions to HMRC by post | By the 19th | GOV.UK, pay deductions to HMRC |
An example with today's dates. A payment made on 5 November 2026 falls in the tax month 6 October to 5 November 2026. The statement and the return are due by 19 November 2026. The 22nd is a Sunday, so an electronic payment is due by Friday 20 November 2026.
CIS340 moves the electronic payment back to the previous banking day. It says nothing similar for the return or the statements, so the calculator shows the 19th as it falls. For bank holidays it uses the England and Wales list published on GOV.UK.
If you pay late, HMRC may charge interest and penalties (GOV.UK).
Paying quarterly. If your average monthly payments to HMRC, including PAYE and National Insurance, are below £1,500, you may choose to pay quarterly. The quarters end on 5 July, 5 October, 5 January and 5 April. Payment is due within 14 days, or 17 days if you pay electronically. You still send a return every month (CIS340 para 4.12).
Three worked examples
| Case | Invoice before VAT | Materials | Rate | Deduction | Pay the subcontractor |
|---|---|---|---|---|---|
| Labour-only pipefitter, registered, not VAT registered, paid 3 December 2026 | £1,200.00 | £0.00 | 20% | £240.00 | £960.00 |
| Supply and fix, VAT registered, reverse charge applies so no VAT is paid to them, paid 12 November 2026 | £5,170.00 | £1,450.00 | 20% | £744.00 | £4,426.00 |
| Labour-only engineer HMRC could not match, paid 20 November 2026 | £1,850.00 | £0.00 | 30% | £555.00 | £1,295.00 |
All three payments fall in the tax month 6 November to 5 December 2026. Statements and the return are due by 19 December 2026, which is a Saturday, so send them by Friday 18 December to be safe. An electronic payment to HMRC is due by Tuesday 22 December 2026.
Common mistakes
- Deducting from the VAT. The deduction is worked out on the amount before VAT.
- Taking off materials you supplied. Only materials the subcontractor paid for come off.
- Taking off their travel. Travel and subsistence you pay them stay in the amount liable.
- Accepting a materials figure without checking. You can ask for receipts. If they have none, estimate the cost of the materials (GOV.UK). If the materials look too high, HMRC may recover the shortfall from you (CIS340 para 3.13).
- Forgetting to deduct. If a deduction was due and you paid in full, you still owe HMRC the amount you should have deducted (CIS340 para 4.12).
- Leaving gross-paid subcontractors off the return. The return lists everyone you paid, whatever their rate (CIS340 para 4.2).
Who does what
- You, the contractor: verify the subcontractor, make the deduction, give the statement, send the return, pay HMRC and keep the records.
- The subcontractor: registers with HMRC and shows materials separately on the invoice, with receipts if you ask.
- HMRC: tells you which rate to use when you verify, and tells you both if it changes.
The full picture, including which building services work is inside CIS and how the VAT reverse charge fits, is in our guide to CIS for building services firms.
What to record for each payment
On or before each payment, record the gross amount excluding VAT, the cost of materials, and the deduction (CIS340 para 3.18). Keep CIS records for at least 3 years after the end of the tax year they relate to. HMRC can fine you up to £3,000 if you cannot show them (GOV.UK).
Doing this every month in Field Suite
Field Suite keeps each subcontractor's UTR, CIS status and verification number. When you record a payment, labour and materials are entered apart and the deduction is worked out on the labour figure, never on materials or VAT. Include any travel or subsistence you pay them in the labour figure, because it stays in the amount liable. Payments are grouped into tax months from the 6th to the 5th. Each subcontractor gets a PDF statement for the month, and you get the month's figures as a CSV to copy into your CIS300 return. You still file the return with HMRC yourself.
See subcontractor and CIS management, prices, or book a demo.
Field Suite is job management software, not a firm of accountants. HMRC decides the rate for each subcontractor; ask your accountant about anything unusual.
Sources
- GOV.UK, What you must do as a CIS contractor: make deductions and pay subcontractors. https://www.gov.uk/what-you-must-do-as-a-cis-contractor/make-deductions-and-pay-subcontractors
- GOV.UK, What you must do as a CIS contractor: file your monthly returns. https://www.gov.uk/what-you-must-do-as-a-cis-contractor/file-your-monthly-returns
- GOV.UK, What you must do as a CIS contractor: pay deductions to HMRC. https://www.gov.uk/what-you-must-do-as-a-cis-contractor/pay-deductions-to-hmrc
- GOV.UK, What you must do as a CIS contractor: record keeping. https://www.gov.uk/what-you-must-do-as-a-cis-contractor/record-keeping
- HMRC, Construction Industry Scheme: a guide for contractors and subcontractors (CIS 340), updated 27 August 2026, paras 2.21, 3.11 to 3.15, 3.18, 4.2, 4.12 and Appendices C, D and E. https://www.gov.uk/government/publications/construction-industry-scheme-cis-340/construction-industry-scheme-a-guide-for-contractors-and-subcontractors-cis-340
- GOV.UK, UK bank holidays (data used for the payment date). https://www.gov.uk/bank-holidays.json
Last checked: 5 November 2026 against the sources above.
Field Suite is job management software for UK building services firms, not a consultancy. Your own risk assessments, contracts and advisers decide what applies to your work. Spotted a mistake? Email info@fieldsuiteapp.com and we correct it.