Calculate Construction Industry Scheme deductions instantly. CIS only applies to labour, never materials.
CIS is not deducted from materials.
Don't forget to issue a CIS Payment and Deduction Statement.
Graftly automates CIS, generates the Payment Statement PDF, and emails it to the subbie instantly.
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The Construction Industry Scheme (CIS) is a UK tax deduction system that requires contractors to deduct money from subcontractor payments and pass it to HMRC. These deductions count as advance payments towards the subcontractor's tax and National Insurance.
For subcontractors registered with HMRC with a valid UTR.
For subcontractors not registered or cannot be verified.
CIS deductions are calculated on the labour portion only:
Formula
CIS = Labour × Rate
Example Calculation
NO.
CIS is never deducted from materials. Only the labour portion of an invoice is subject to CIS deductions. This is one of the most common mistakes new contractors make.
Every time you make a CIS deduction, you must provide the subcontractor with a Payment and Deduction Statement within 14 days.
Statement Must Include:
Graftly automatically generates compliant CIS Payment and Deduction Statements when you create invoices. No spreadsheets, no manual calculations.
Try Graftly Free→Tax Year
6th April → 5th April
Monthly Returns Due
19th of each month
Some subcontractors qualify for Gross Payment Status, meaning no CIS is deducted. To qualify:
Deducting CIS from materials
Only labour is subject to CIS
Using the wrong rate
Always verify the subcontractor with HMRC
Not issuing statements
You must provide a statement within 14 days
Late returns
Monthly returns due by the 19th
Not keeping records
Keep CIS records for at least 3 years
Graftly handles CIS deductions automatically, generates compliant statements, and exports everything your accountant needs.
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