Answers · UK 2025/26
What is the CIS standard deduction rate in 2026/27?
The CIS standard deduction rate is 20% for registered subcontractors and 30% for unverified or unregistered subcontractors.
Full answer
Under the Construction Industry Scheme (CIS), contractors must deduct tax from payments to subcontractors. The deduction applies to the labour element (materials are excluded). Registered subcontractors face a 20% deduction rate. Subcontractors not registered with CIS face a 30% deduction. Subcontractors with a clean compliance record and sufficient turnover can apply for gross payment status, meaning no deduction at all. Subcontractors claim credit for CIS deductions suffered via their self-assessment return (or employer payroll if employed elsewhere). Contractors must file monthly CIS returns to HMRC; failure incurs automatic penalties of £100/month.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.