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CIS Deduction & VAT Reverse Charge Calculator
Two jobs the construction industry gets wrong most often: how much CIS tax to deduct from a subcontractor, and whether to charge VAT or apply the domestic reverse charge. Sort both in under a minute.
Part 1
CIS deduction calculator
Enter the labour and materials on the subcontractor's invoice (all figures excluding VAT). The CIS deduction is taken from the labour element only.
VAT is never subject to CIS deduction. Use Part 2 below if you're unsure whether the reverse charge applies.
Part 2
VAT domestic reverse charge — does it apply?
The reverse charge has applied to most business-to-business construction services since 1 March 2021. Answer the five questions to see whether you charge VAT as normal or apply the reverse charge, and what your invoice should say.
Who this is for
UK contractors and subcontractors in construction — builders, groundworkers, electricians, plumbers, roofers, plasterers and the trades that invoice each other. If you pay subcontractors, take on subcontract work, or raise VAT invoices for building work, these are the two calculations you have to get right every time. Everything here is worked out in your browser — no figures are sent anywhere. Once you know the right deduction and VAT treatment, build the invoice itself with our Invoice Generator.
How much is the CIS deduction — 20%, 30% or 0%?
It depends on the subcontractor's status when you verify them with HMRC. A registered (net) subcontractor has 20% deducted from their labour. One who isn't registered or can't be verified has 30% deducted. A subcontractor with gross payment status has nothing deducted — they're paid in full and settle their own tax. The deduction only ever comes off the labour element; materials, plant hire, consumables, fuel, the CITB levy and VAT are all excluded from the calculation.
When does the VAT domestic reverse charge apply?
Since 1 March 2021 it applies to standard-rated or reduced-rated construction services supplied between two VAT-registered businesses that are both within the CIS, where the customer is not an end user or intermediary supplier. When it applies, you don't charge VAT — you state on the invoice that the reverse charge applies, and your customer accounts for that VAT to HMRC on their own return. If the customer is a private individual, isn't VAT registered, isn't CIS registered, or has confirmed they're an end user, you charge VAT the normal way.
What do I actually write on the invoice?
When the reverse charge applies, HMRC requires the invoice to make clear the reverse charge applies and that the customer is the one who must account for the VAT — for example "Reverse charge: Customer to account for the VAT to HMRC" or a reference to "VAT Act 1994 Section 55A". You still show the VAT rate or the amount of VAT that would have applied, but you don't add it to the total the customer pays. Part 2 above gives you the wording once you've answered the five questions.
Please note: this tool gives a guide or estimate only. It may not be 100% accurate and is not professional advice — always check the figures before you rely on them. Rates, thresholds, allowances and rules can change without notice and may be out of date by the time you use this tool. Verify against HMRC / GOV.UK or your accountant before acting. CIS rates and the VAT reverse-charge rules can change — always confirm a subcontractor's status by verifying them with HMRC, and check the current rules on gov.uk before relying on a figure or issuing an invoice. This is general guidance, not tax advice; speak to your accountant for your situation.
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