Add or remove VAT at 20%. Check if Flat Rate Scheme saves you money. Calculate CIS tax deductions for construction work. Free, no signup.
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Start freeThe VAT Flat Rate Scheme lets small businesses pay a fixed percentage of VAT-inclusive turnover to HMRC instead of tracking input and output VAT. The percentage depends on your trade type. You can join if your turnover is under £150,000. This calculator shows whether you would save money on the Flat Rate Scheme based on your trade and turnover.
The Construction Industry Scheme (CIS) requires contractors to deduct money from subcontractors payments and send it to HMRC as an advance towards the subcontractors tax and National Insurance. The deduction is 30% for unregistered subcontractors, 20% for registered subcontractors, and 0% if the subcontractor has gross payment status.
CIS deductions are calculated on the labour portion of the invoice, not materials. If you charge £1,000 labour and £500 materials, the CIS deduction is based on £1,000 only. The contractor pays you £500 materials + £800 labour (after 20% CIS) = £1,300 total. You claim the £200 CIS deduction back on your Self Assessment.
You must register for VAT if your turnover exceeds £90,000 (2024/25 threshold). You can register voluntarily below this threshold, which lets you reclaim VAT on purchases. This is worth doing if you buy a lot of VAT-rated materials (like plumbers, electricians, builders) but not if most of your costs are labour or zero-rated.