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CIS deduction calculator
What will actually land in your bank on an invoice — with the materials split applied properly, the travel line shown for what it costs you, and the reverse charge taken into account.
What will actually land in your bank on an invoice — with the materials split applied properly, the travel line shown for what it costs you, and the reverse charge taken into account.
The whole invoice — labour, materials and everything else.
Only materials you directly incurred. Materials the contractor bought and recharged to you do not reduce the deduction.
Plant hire costs come out of the deduction base.
This does NOT come out. Enter it and the tool will show you what the deduction on it is costing.
If in doubt, the reverse charge is the default absent a written end-user notification.
Illustrative figures on 2026/27 rates and simplified assumptions. This is information, not advice, and it is no substitute for a proper calculation on your practice's real numbers. Ask us for the accurate version — it's free.
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What this is doing
It is charged on the payment less the cost of materials you directly incurred, and less consumable stores, fuel other than fuel for travelling, plant hire, the cost of manufacture or prefabrication, and the VAT you have charged. That is why a materials-heavy invoice and a labour-only invoice of the same value produce very different amounts of cash.
Two things this tool exists to make visible.
Travel and subsistence stay inside the base. A mileage line or a night away has the full deduction taken off it. That is correct under CIS 340 and it is not an error to fix — but it is worth seeing the number, because a business that covers a wide patch is having 20% taken off something that was never profit.
Who bought the materials changes the answer. You must have directly incurred the cost. If the contractor buys the materials and recharges them to you, you have not directly incurred them and no reduction is due. The same £3,000 of materials therefore either reduces your deduction by £600 or does nothing at all, depending purely on whose account they went on — which makes it a commercial decision with a tax consequence rather than an administrative detail.
If the reverse charge applies you add no VAT to the invoice at all, and the customer accounts for it. That is not a cost, but it is a cash-flow change: before March 2021 you would have held that VAT for up to four months. Set the reverse charge question in the tool and you will see the difference in what actually lands.
If you are not sure whether it applies, the reverse charge checker walks the six conditions in the order they have to be answered.
These tools use sensible simplifications. A free CIS review gets you the accurate version — and usually two or three things worth fixing before your year end.
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