A common CIS review issue is deducting on the whole payment instead of the labour only, or using the wrong HMRC status. Enter one subcontractor payment below and see the figure produced by the published CIS arithmetic.
Guidance, not advice. This applies published CIS arithmetic to the figures and status you enter; it does not verify the sub with HMRC. Check the current rules on GOV.UK and verify with a qualified professional if unsure.
No magic, no guesswork — here is the arithmetic, following HMRC's published method. Always check the current rules and rates on GOV.UK.
Labour element = gross paid (excl VAT) − the subcontractor's direct material cost. You only ever deduct on this labour figure.
Currently 20% if registered & verified · 30% if unverified / not matched · 0% if verified for gross payment (confirm the current rates on GOV.UK). The rate applies to the labour, not the gross.
The subcontractor is paid the gross minus the CIS deduction. That deduction figure is exactly what goes on the statement and into your CIS300 total.