Painter CIS Deductions: What 20% and 30% Really Cost

How CIS works on a decorating invoice

The Construction Industry Scheme exists to stop tax going missing in construction's long chains of contractors and subcontractors. The mechanism is blunt: when a contractor pays a subcontractor for construction work, the contractor deducts a slice and sends it straight to HMRC. Painting and decorating counts as construction work under the scheme — interior and exterior painting, wallpapering, and associated preparation all fall inside it.

The slice depends on your status. Registered subcontractors lose 20% of the labour charge. Subcontractors who have not registered, or whom the contractor cannot verify with HMRC, lose 30%. Subcontractors with gross payment status lose nothing — 0% — and settle everything through Self Assessment. Registration itself is free and done through HMRC; there is no reason for a working subcontractor to sit in the 30% bracket by choice.

The crucial point: the deduction is not a tax bill, it is a down payment. Every pound deducted counts toward the income tax and National Insurance you owe for the year. If the deductions exceed what you actually owe — common for decorators with heavy material costs and modest profits — HMRC repays the difference after your Self Assessment. The pain of CIS is cash flow, not cost.

A painter’s invoice, worked through

Take a typical decorator's invoice to a main contractor: £2,400 for labour and £600 for paint and materials — £3,000 in total. CIS applies to the labour only. At the 20% registered rate, the contractor deducts £480 from the £2,400 labour charge. The materials pass through untouched. You receive £2,520: the £600 of materials plus £1,920 of labour after deduction.

If you were unregistered, the same invoice would lose 30% of the labour — £720 — and you would receive £2,280. That £240 difference is the price of not registering, paid on every single invoice until you sort it out. With gross payment status, you would receive the full £3,000 and settle the tax yourself at year-end.

Notice what the invoice structure does. Because the £600 of materials is itemised separately, CIS touches only £2,400. A decorator who invoices a single £3,000 lump sum with no materials split invites the contractor to deduct from the whole amount — £600 at 20% instead of £480. Itemising is not admin for its own sake; it is £120 kept on this invoice alone.

Materials: the receipt habit that cuts your CIS bill

Decorators spend more on materials than almost any other trade relative to the job value — emulsion, undercoat, gloss, primer, filler, caulk, paper, masking, dust sheets. Every pound of that is outside CIS, provided it is genuinely materials and you can show it. The decorators with the lowest effective CIS bills are not the ones gaming the system; they are the ones with a shoebox (or an app) full of receipts and a clean split on every invoice.

The rule to live by: invoice labour and materials as separate lines, always. Keep every materials receipt for the tax year. If the contractor supplies the paint directly or reimburses materials separately, there is no deduction on that portion at all — it was never your income. What HMRC will not accept is labour dressed up as materials: relabelling your day rate as 'paint' is misrepresentation, and the penalties dwarf any saving.

At year-end the receipts do double duty. Materials are an allowable business expense against your profits, so the same £600 of paint that escaped CIS also reduces the income tax and National Insurance you owe. One habit, two savings — which is why the organised decorator consistently keeps more than the disorganised one on identical invoices.

Site work vs domestic work: when CIS applies

CIS only bites when a contractor pays you. New-build snagging and decorating for a housebuilder, office repaints for a main contractor, school work through a facilities contractor — all CIS, 20% off the labour if you are registered. The contractor verifies you with HMRC, deducts, files a monthly return, and gives you a payment and deduction statement. Keep every one of those statements; they are your proof at Self Assessment time.

Domestic work is the other world entirely. A private homeowner having their house painted is not a contractor under the scheme, so there is no deduction, no verification, no monthly return — you invoice, they pay, you settle the tax yourself. The same applies to most small landlords: an individual renting out a couple of properties is not a deemed contractor. (Property developers and businesses spending heavily on construction can be — if a 'domestic' client starts looking like a developer, check the position rather than assuming.)

Most decorators straddle both. The practical discipline is keeping the two income streams visibly separate: contractor invoices with CIS deductions and statements filed one side; domestic invoices with no deductions the other. Your Self Assessment pulls them together at year-end, and clean separation is what makes the CIS credit claim straightforward instead of a February panic.

Getting to 0%: gross payment status

Gross payment status is the scheme's reward for a clean record: the contractor pays your invoices in full, with no deduction, and you settle all tax through Self Assessment. For an established decorator with steady contractor work, it transforms cash flow — no more money sitting with HMRC for months, no more waiting on rebates.

HMRC grants it to subcontractors who meet its tests, which centre on a compliant tax history and a minimum level of construction turnover. The application is made to HMRC directly, and the status can be reviewed or withdrawn if compliance slips. Full details of the qualifying conditions are on GOV.UK — check them before applying, because a rejected application wastes weeks.

It is not automatically the right move for everyone. Gross payment status means larger Self Assessment bills and the discipline to set the money aside — 20% of everything, at least. Decorators who struggle to leave tax money alone can find the 20% deduction was doing them a favour. Be honest about which kind of saver you are before you apply.

The year-end reckoning: CIS and Self Assessment

Every subcontractor files a Self Assessment tax return, and for decorators on CIS the return has two halves: the profit you actually made, and the CIS already deducted from your invoices. Your real tax bill is calculated on the profit — income minus allowable expenses like materials, van costs and tools. The CIS deductions are then credited against that bill.

When the deductions exceed the bill, HMRC repays the difference. This is the normal outcome for many decorators: 20% deducted from labour all year, but profits reduced by materials, mileage and the Personal Allowance, often leaves an overpayment. The rebate is not a bonus — it is your own money coming back — but decorators who expect it can plan around it rather than discovering it by accident.

Three habits make year-end painless. File early rather than in January, so any rebate arrives sooner and any bill is known in time. Keep every contractor deduction statement — without them, proving the credit is slow. And put money aside monthly for the eventual bill if you have domestic income with no CIS deducted from it; that half of your earnings has had nothing taken off at all.

Where the figures come from

CIS deduction rates — 20% registered, 30% unregistered or unverifiable, 0% with gross payment status — are from GOV.UK, verified on 24 September 2026. The £2,400 labour plus £600 materials invoice is a worked illustration using those rates, not a reported market figure. The £15.70 median hourly rate is ONS ASHE 2025 provisional data (SOC 2020 code 5323, pay period April 2025).

Tax bands referenced are 2026/27 England: Personal Allowance £12,570, 20% to £50,270. CIS rules change occasionally and HMRC guidance is the final word — if this page and GOV.UK ever disagree, GOV.UK wins.