If you're a CIS subcontractor, the mortgage you're offered can depend heavily on which lender you apply to. Standard lenders often assess you on your net, post-expense taxable income - but a number of specialist and mainstream lenders will instead work from your gross CIS income, which can significantly increase how much you can borrow.
Key takeaway: Under the Construction Industry Scheme, a registered subcontractor has 20% tax deducted from their CIS invoices before they're paid. Many lenders only look at your net taxable profit after expenses, which can understate your true earning power. CIS-aware lenders instead assess your gross income, which is usually a higher and fairer figure.
[[stats: 20% = standard CIS deduction for registered subcontractors | Gross income = what CIS-aware lenders assess | 4.5-5.5x = typical income multiples with the right lender]]
What is the Construction Industry Scheme (CIS)?
The Construction Industry Scheme is HMRC's system for tax on payments to subcontractors in the construction industry. Under CIS, a contractor deducts money from your CIS invoices and passes it to HMRC on your behalf - these deductions count as advance payments towards your tax and National Insurance, not as extra tax on top of what you owe.
If you're registered for CIS, contractors deduct 20% from your CIS invoices. This is known as net payment status. Subcontractors who qualify can also apply for gross payment status, meaning no deduction is made at source and you settle your tax bill through Self Assessment instead.
Why does CIS complicate a standard mortgage application?
Mainstream mortgage affordability checks are built around a stable monthly salary. As a CIS subcontractor, your income doesn't look like that on paper, even if it's substantial and consistent in practice:
- Your take-home pay already has tax deducted at source, which can make your finances look more complex than an employee's
- Standard lenders typically start from your net profit after business expenses, shown on your tax return - a figure that's often well below what you actually earn before costs
- Some lenders want 2 to 3 years of accounts before they'll lend at all, which is a problem if you've only recently gone self-employed
This is exactly the gap that CIS-aware lenders are built to close.
Standard assessment vs a CIS-aware assessment
[[table: | Standard approach | CIS-aware approach ;; Basis | Net profit, after expenses and tax | Gross CIS income, before deductions ;; Evidence | 2-3 years' accounts or tax returns | CIS invoices, often from a shorter track record ;; Best suited to | Long-established, stable net profit | Contractors with strong day rates but modest net profit on paper]]
Tip: Keep every CIS invoice your contractor gives you, plus recent bank statements showing regular payments. The cleaner this evidence is, the easier it is to place your case with a lender that assesses gross income.
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How much could you borrow as a CIS contractor?
Because the gap between net and gross income can be substantial, the lender you choose can change your borrowing power by tens of thousands of pounds. Enter your day rate below to see how it could translate into an annual income figure and indicative borrowing.
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Most lenders that work with CIS contractors apply income multiples similar to the rest of the market - typically around 4.5 times income, with some stretching to 5 or 5.5 times for stronger cases. The figure your particular lender uses, and how they annualise your day rate, varies - which is exactly where the right advice matters.
How do different CIS-aware lenders assess your income?
Even among specialist CIS-aware lenders, the assessment method varies, which is exactly why the right lender for one contractor isn't always the right lender for another.
[[table: Method | How it works ;; 3-month average | Averages your last 3 months of CIS invoices, then annualises the figure using a 46-week working year ;; 6-month average | Averages your last 6 months of CIS invoices, then annualises the figure using a 46-week working year ;; 12-month total | Adds together your last 12 months of CIS invoices directly, with no annualising assumption]]
Example: A bricklayer applying for a mortgage in February might have November, December and January CIS invoices that show lower income than usual, simply because bad weather reduces the work available over winter. A lender using a 3-month average could understate his true income at exactly that point in the year, while a lender that totals his last 12 months of CIS invoices would smooth out that seasonal dip and is likely to give a fairer, higher assessment.
This is why we look at the whole picture, not just one lender's headline criteria, before recommending a route. The same contractor could get a meaningfully different outcome depending on the time of year they apply and which lender's assessment method they're matched to.
What documentation will you need?
Be prepared to provide:
- Recent CIS invoices from your contractor(s)
- SA302 tax calculations and tax year overviews from HMRC, where you have them
- Bank statements showing your CIS income being paid in
- Proof of ID and your credit report
Case study: An illustrative example of how lender choice affects the outcome for a CIS contractor.
Situation: A registered CIS subcontractor earning a day rate of £220, working around 4-5 days a week. After allowable expenses, his tax return showed a net profit of £34,000 for the year. Lenders offered a mortgage of £153,000 based on this figure.
What we did: We evidenced his last 3 months of CIS invoices and bank statements showing consistent payments, and placed him with a lender that averages recent gross CIS income rather than relying on his net taxable profit.
Outcome: The lender assessed his income at a materially higher figure than his tax return alone suggested, supporting noticeably more borrowing than the standard net-profit route - instead averaging his latest 3 months of CIS invoices, which boosted his borrowing to £222,640. Figures are illustrative; outcomes depend on individual circumstances.
Good to know: This applies to remortgaging too. If your current mortgage was arranged using your net profit figure, a remortgage using your gross CIS income could support a better rate or more borrowing when your deal ends - see our remortgage advice page.
How can CIS contractors strengthen their application?
Keep your CIS invoices and bank records organised from the start, and avoid unexplained gaps between contracts where possible. Continuity of work in construction, even across different contractors, is viewed favourably. If you also have limited company accounts, bring these too - we'll use whichever route gives you the strongest outcome. At Quanstrom Financial, we work regularly with CIS subcontractors and can review your income evidence to match you with a lender suited to how you're actually paid. Our mortgage advice team can talk you through your options before anything goes near a credit check.
Frequently asked questions
Can CIS subcontractors get a mortgage without 2-3 years of accounts?
With the right lender, yes. Some lenders that specialise in CIS income will consider a shorter track record if you can evidence consistent CIS invoices and bank payments, particularly if you have a longer history in the same trade.
Do mortgage lenders use gross or net CIS income?
It depends on the lender. Standard lenders typically use your net profit after expenses, shown on your tax return. CIS-aware lenders assess your gross income before deductions, which is usually a higher figure.
How much can CIS contractors borrow for a mortgage?
Most lenders apply income multiples similar to the wider market, typically around 4.5 times income, with some going higher for stronger cases. Your actual figure depends on your income evidence, credit profile, deposit and outgoings.
What if I operate as a CIS contractor through my own limited company?
There are some specialist lenders who can assist with this.
What if I run multiple CIS contracts?
We can still help. Some lenders allow up to 3 contracts running consecutively.
What if I'm on a visa?
If you're on a visa, you may still qualify with a lender who specialises in CIS income. Read our guide to getting a mortgage on a visa.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole-of-market mortgage broker based in Eastbourne, East Sussex.
This article is for information only and doesn't constitute personal advice. Everyone's circumstances differ - speak to a qualified adviser for a recommendation tailored to you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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