What is CIS?
The Construction Industry Scheme (CIS) is a tax framework for self-employed workers in the construction industry. Under CIS, contractors deduct 20% (or 30% for unregistered subcontractors) from your payments and pass it to HMRC as advance tax payment.
How CIS Payments Work
Gross payment for work: £1,000
Less: CIS deduction (20%): -£200
Net payment received: £800
The £200 deduction goes to HMRC as tax payment. You receive £800, but your assessable income for mortgage purposes can be £1,000 (gross).
CIS Workers Include
Trades
- • Bricklayers
- • Plumbers
- • Electricians
- • Carpenters
- • Plasterers
Site Workers
- • Scaffolders
- • Groundworkers
- • Roofers
- • Plant operators
- • Labourers
Specialists
- • Decorators
- • Tilers
- • Glaziers
- • Fitters
- • Surveyors
The mortgage challenge
How Income is Assessed
Gross Income Method
Best for CISCIS-specialist lenders assess your gross income before the 20% CIS deduction. This recognizes that the deduction is a tax payment, not a reduction in your earning capacity.
Weekly gross earnings: £1,200
× 48 weeks
= £57,600 assessed income
→ Borrowing: ~£259k
Net Income Method
Avoid if possibleSome mainstream lenders use your net income after CIS deduction, significantly reducing your borrowing capacity.
Weekly net earnings: £960
× 48 weeks
= £46,080 assessed income
→ Borrowing: ~£207k
The Difference
Same CIS contractor, same earnings — but £52k difference in borrowing:
Gross assessment
£259k
Net assessment
£207k
Lender selection is critical
Documentation Required
CIS-Specific Documents
CIS Payment Statements
Monthly or weekly statements from each contractor you work for, showing gross pay, deductions, and net pay. Usually need 3-12 months.
CIS Tax Deduction Vouchers
Vouchers issued by contractors confirming deductions made. These verify your gross earnings.
Self Assessment (SA302)
Tax calculation showing your total CIS income. Most lenders want 1-2 years of SA302s.
Tax Year Overview
HMRC document confirming your tax return matches their records.
Additional Documents
- Bank statements (3-6 months)
- Proof of CIS registration
- UTR (Unique Taxpayer Reference)
- ID and proof of address
For Shorter History
- Previous employment P60s (if recent transition)
- Reference from main contractor
- Evidence of construction qualifications (CSCS, etc.)
Keep your paperwork organized
Lender Options
CIS Specialists
Lenders who understand CIS and use gross income for assessment.
Kensington
Gross income, 6+ months history
Precise
Flexible criteria, broker-only
Vida
Specialist lender
Accord
Part of Yorkshire BS
Building Societies
Often more flexible with manual underwriting. May consider CIS favorably.
Yorkshire BS
Case-by-case review
Skipton
Self-employed friendly
High Street Caution
Mainstream banks may not understand CIS or may use net income.
Always confirm how they assess CIS income before applying. Avoid lenders who treat CIS workers unfavorably.
Tips for Success
1. Use a CIS-Experienced Broker
Brokers who specialize in CIS mortgages know which lenders use gross income and can navigate the specific requirements. They can often access better deals than going direct.
2. File Your Tax Return Promptly
Having up-to-date SA302s available speeds up your application. File your self-assessment as soon as the tax year ends (after 5 April) to get your latest figures on record.
3. Keep All CIS Statements
Organize your CIS payment statements by contractor and month. You'll need these to prove your income, especially if you work for multiple contractors.
4. Show Income Consistency
Lenders like to see consistent work over time. If you have regular relationships with certain contractors, this demonstrates income stability.
5. Build History Before Applying
If you've recently started CIS work, consider building 12+ months of history before applying. This opens up more lender options with better rates.
CIS workers can get mortgages
Find CIS-friendly lenders
Get matched with lenders who use gross income assessment for CIS contractors.
Get matched