Does CIS apply to work for homeowners?

No. CIS only covers payments between construction businesses. A private homeowner paying you directly deducts nothing — you invoice, they pay in full, and you handle your own tax.

Is CIS deducted from materials?

No — only from the labour element of your invoice. That's why itemising labour and materials separately matters: lump them together and the contractor may deduct from the whole amount.

What's the difference between 20% and 30% deductions?

20% applies if you're registered for CIS, 30% if you're not. Registering is free and quick with HMRC — most subbies do it the week they start.

TradePA › Glossary › CIS

The trades glossary · plain English · updated 10 July 2026

What is CIS?

The short version: The Construction Industry Scheme (CIS) is HMRC's system for taxing construction subcontractors at source. A contractor paying a subbie deducts 20% (registered) or 30% (unregistered) from the labour part of the invoice and pays it to HMRC as an advance on the subbie's tax. Materials aren't deducted.

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The detail

Who it applies to

If you work for another construction business — subbing for a main contractor, a developer, or a bigger firm — you're likely inside CIS. Work done directly for homeowners is outside the scheme entirely: a private customer never deducts CIS from your invoice.

How the deduction works

Your invoice splits labour from materials. The contractor deducts 20% (or 30% if you're not CIS-registered) from the labour only, pays you the rest, and gives you a deduction statement. Those deductions count toward your tax bill at Self Assessment — many subbies end the year with a refund.

Getting more of your money on the day

Registering for CIS drops the deduction from 30% to 20% — the single easiest pay rise in construction. Established firms can apply for gross payment status: no deduction at all, you settle your own tax. HMRC sets turnover and compliance tests for it.

Where TradePA fits

And the paperwork around it?

TradePA does the CIS bit on the invoice: flick it on, pick 20% or 30%, tick which lines are labour, and the deduction comes off those and nothing else — materials left alone, as they should be. What it won't do is your CIS return; that's still the accountant. But every invoice is itemised right and every merchant receipt is filed against its job, so the return isn't an archaeology dig.

Fair questions.

Does CIS apply to work for homeowners?: No. CIS only covers payments between construction businesses. A private homeowner paying you directly deducts nothing — you invoice, they pay in full, and you handle your own tax.
Is CIS deducted from materials?: No — only from the labour element of your invoice. That's why itemising labour and materials separately matters: lump them together and the contractor may deduct from the whole amount.
What's the difference between 20% and 30% deductions?: 20% applies if you're registered for CIS, 30% if you're not. Registering is free and quick with HMRC — most subbies do it the week they start.

Related terms: VAT reverse charge · Retention · Day rate vs price work. General information for UK trades, checked July 2026 — not legal, tax or compliance advice.

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