CIS deduction calculator: what comes off your invoice

No. To work out a CIS deduction, the contractor starts with the gross invoice and takes away what the subcontractor paid for VAT, consumable stores, fuel (except for travelling), plant hire, manufacturing or prefabricating materials, and materials; the CIS rate is then deducted from the amount left.

20% if you’re registered for CIS, 30% if you’re not, and nothing if you have gross payment status. The contractor checks your status with HMRC.

No. VAT is taken out before the deduction is worked out, so the deduction is the same whether or not you charge VAT.

The VAT domestic reverse charge must be used for most standard- and reduced-rated building and construction services supplied between VAT-registered businesses and reported within the Construction Industry Scheme, for invoices with a tax point on or after 1 March 2021. It does not apply to private domestic customers, or to end users who tell their supplier in writing that they are end users.

Under the domestic reverse charge the supplier's invoice notes that the reverse charge applies and states the VAT due (or the rate), but the VAT is not included in the amount charged; the customer accounts for the VAT on its own VAT return and recovers it on the same return, subject to the normal rules.

A sole-trader subcontractor gets over-deducted CIS back by entering gross pay as income and total deductions as CIS deductions on the Self Assessment return; HMRC deducts them from the bill and repays any excess. Before you join Making Tax Digital, over-deducted CIS is claimed back through your Self Assessment tax return. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return, and any refund is requested separately through HMRC online services. Either way, the sooner after 5 April the return is filed, the sooner HMRC can repay you.