Are the calculators HMRC compliant?

Our calculations are built to align with HMRC guidance and use the latest April 2026 rates. However, they're for guidance only – always verify complex cases with HMRC or a qualified professional.

Yes. We're ICO registered (ZC013807) and calculations run in your browser – we don't store sensitive payroll data unless you explicitly save it to your account.

Do you integrate with payroll software?

Reckonly tools work as standalone calculators alongside your existing software like Sage, Xero, and QuickBooks. No integration required – use our tools as a pre-check layer.

What's the VAT registration threshold?

The UK VAT registration threshold is £95,000 taxable turnover in a rolling 12-month period. You must register within 30 days of exceeding this threshold.

What is the CIS deduction rate for 2026/27?

Three rates apply: 0% for subcontractors with gross payment status, 20% for registered subcontractors with a valid UTR, and 30% for unregistered subcontractors. Rates are unchanged for 2026/27.

Do CIS deductions apply to materials?

No. CIS deductions only apply to the labour element of a payment. Materials, plant hire, scaffolding, equipment hire, and travel are all excluded. Subcontractors must itemise invoices.

How do I verify a subcontractor under CIS?

Log in to HMRC's CIS online service or use the Reckonly CIS Verifier tool. You need the subcontractor's UTR, name, and for companies their company registration number. HMRC confirms the applicable deduction rate.

What is gross payment status?

Gross payment status allows a subcontractor to receive full payment without CIS deductions. HMRC grants it to those who pass a turnover test (£30,000 for sole traders), have a clean tax record, and have been in business at least 12 months.

What happens if I miss a CIS monthly return?

HMRC issues automatic penalties: £100 for one day late, rising to £200 after two months, then £300 or 5% of CIS liability (whichever is higher) at six months. A further penalty applies at twelve months.

Updated for 2026/27 Tax Year

CIS Deductions & VerificationCalculator 2026/27

Verify subcontractor status, apply the correct CIS rate — 0%, 20% or 30% — and calculate exactly what to deduct from each payment. For contractors, accountants, and payroll teams.

Verify Subcontractor Status

Calculate CIS Deductions

CIS Deduction Rates 2026/27

The rate you deduct depends on the subcontractor's verification status. Always verify before the first payment.

Gross Payment Status

Verified UTR plus company registration on record with HMRC. Subcontractor receives full payment.

20%

Net Payment (Registered)

Subcontractor holds a valid UTR and is registered for CIS. Standard net deduction rate applies.

30%

Unregistered

No UTR, invalid UTR, or subcontractor not found on the HMRC CIS register. Higher rate applies.

Labour vs Materials: What Is Deductible?

CIS deductions apply only to the labour element of a payment. Materials, plant hire, and travel are exempt. Subcontractors must itemise invoices.

Cost TypeCIS Applies?

Labour and supervision costs Deductible

Sub-subcontractor payments (labour element) Deductible

Materials — timber, bricks, cables, pipe Exempt

Plant hire and equipment hire Exempt

Scaffolding and temporary structures Exempt

Subsistence and travel Exempt

Who Needs to Register for CIS?

CIS applies to contractors and subcontractors in construction. Householders and self-build projects are excluded.

Mainstream contractors

Builders, groundworkers, electricians, plumbers, plasterers, decorators — any business whose main trade is construction.

Deemed contractors

Businesses outside construction whose spend on construction operations exceeds £3 million in any 12-month period.

Subcontractors

Any individual or firm doing construction work for a contractor. Register with HMRC to avoid the 30% unregistered rate.

CIS Monthly Return Deadlines

Returns are due by the 19th of the following month. Submit a nil return even if no payments were made.

19th each month

CIS monthly return due

Covers the previous tax month (6th to 5th). File a nil return if no payments were made.

19th each month

CIS deductions payment due

22nd for electronic payment. Late payment attracts interest from HMRC.

19 May each year

April return deadline

First return of the new tax year, covering payments 6 April to 5 April.

Within 14 days

New contractor registration

Late Filing Penalties

How Late	Penalty
1 day late	£100
2 months late	£200
6 months late	£300 or 5% of CIS deductions (higher)
12 months late	Further £300 or 5% + potential criminal investigation