CIS: what comes off before the 20% and what does not?

Q: CIS: what comes off before the 20% and what does not?

Only the materials you paid for, at what you paid. Everything else you spend, diesel, tools, insurance, travel, lodge money, stays inside the 20% deduction and comes back once a year on your return, if you can prove it.

Materials come off first

The contractor deducts from the labour part of the invoice, not from the materials. That much the law protects. It is the cost you actually paid for the materials, not what you charged on top: mark up on materials is treated as labour and the 20% comes off it.

Nothing else does

Your diesel, your tools, your insurance, your travel, the lodge money when you are away from home. None of that is taken out before the deduction. It is all still sat inside the 20%, and you are the one who paid for it.

How it comes back

Once a year, through your Self Assessment return. Every receipt you kept comes off your profit before the tax is worked out, and the CIS already taken is set against the bill. Every receipt you binned is gone; nobody can put it back in January.

If you never registered as a subcontractor the deduction is 30%, not 20%. Same job, same invoice, a third more taken up front. Registering is free and takes a phone call.

See where you stand with the CIS refund estimator

Free, no account, one minute.

Lekhio works it out. You send it. Nothing goes near HMRC until you press yes.

Where HMRC says it: HMRC Construction Industry Scheme guide CIS340, sections on materials and the deduction rates; HMRC CIS Reform Manual on what counts as materials. Checked 2026-08-31. This is general information about the rules, not advice on your own position.