A contractor deducts CIS from the labour part of the invoice only. Materials are taken off the total first, and the deduction is applied to what remains.

• Registered subcontractors are deducted at 20%.
• Not registered or unverified subcontractors are deducted at 30%.
• Gross payment status means no deduction is taken.

VAT is left out of the calculation entirely — the deduction is worked out on the VAT-exclusive figure. Materials must be what the subcontractor actually paid; a marked-up materials figure is not deductible from the labour amount.

The deduction is not a tax in itself. It is an advance payment toward the subcontractor's Income Tax and National Insurance, and is settled through their Self Assessment return.

Where these rates come from

Every figure above is read from a dated rate file rather than written into the page, and each entry records the gov.uk page it came from. See What is the Construction Industry Scheme on gov.uk.