Published 2026-07-13 · Contractor Mortgage Guide

CIS and construction contractor mortgages: getting your gross pay recognised

Quick answer: If you're paid under the Construction Industry Scheme, your contractor pays HMRC tax at source before you ever see the money — 20% if you're registered, 30% if you're not. That deduction is exactly what confuses mortgage lenders: some will assess your gross CIS pay, much closer to what you actually earn, while others treat you like any other self-employed applicant and ask for two or three years of accounts or tax calculations. CIS is one of the least standardised corners of contractor mortgage lending — our research found several lenders' published criteria simply don't spell out how they treat it, which makes checking before you apply more important than usual, not less.

Why CIS deductions trip lenders up

CIS exists to stop tax being lost when subcontractors move between sites and contractors, not to describe how much you actually earn. A subcontractor invoicing £1,000 for a week's work might see only £800 (registered) or £700 (unregistered) land in the bank, with the rest already paid to HMRC on their behalf. Reclaimable through your tax return, yes — but if a lender only looks at bank statements or a simplistic reading of your CIS statements, it can mistake your deducted, netted-down pay for your real income and lend against a figure well below what you can afford.

The mortgage question, then, isn't really "does this lender accept CIS subcontractors" — most will engage with CIS income in some form — it's which figure they assess you on: your gross invoiced pay (closer to true earning power), or a self-employed-style average of two or three years' declared profit after all deductions and expenses. Those two routes can produce very different maximum loan sizes for the same subcontractor, in the same way that day-rate contractors see very different outcomes depending on which lender annualises their rate.

What we could verify — and what's genuinely unclear

CIS treatment turned out to be one of the harder areas to pin down from published intermediary criteria. A few lenders state their position plainly; several others simply don't address CIS explicitly on their public criteria pages, which we've marked as unconfirmed rather than guessed at.

Clearly documented:

• NatWest states CIS is "Processed as 'Employed' despite self-employment tax status" — the clearest employed/gross-CIS position we found, assessing gross figures minus expenses from 12 months' CIS statements.
• Halifax uses a 46-week gross-average mechanism — functionally similar to employed treatment, though its published criteria don't explicitly label CIS "employed" the way NatWest's does.
• Skipton offers a 12-month gross-average-minus-materials route as an alternative to standard self-employed SA302 evidence — a second gross-favourable option.
• Kensington lists CIS explicitly, but files it under its complex income category alongside other non-standard employment types — accepted in principle, but expect more underwriting questions than a straightforward PAYE case.
• Barclays does not accept CIS on a simplified basis: its published criteria route CIS income to full self-employed underwriting, meaning two years' accounts or tax calculations, the same as a sole trader.

Refer or self-employed-routed:

Several lenders we checked — including Virgin Money, Clydesdale and Nationwide — mark CIS as a "refer" case that's assessed via their self-employed route rather than a dedicated CIS policy, and Accord notes CIS as "secondary-sourced" income, meaning it can support an application but generally isn't the primary figure the lender lends against.

Unconfirmed:

For a handful of others on our panel — including Coventry Building Society, Leeds Building Society and Metro Bank — published intermediary criteria don't spell out CIS treatment clearly enough for us to state a confident position either way. That's not the same as "they don't accept CIS subcontractors" — it just means the public documentation doesn't resolve it, so this is a case where speaking to the lender (or a broker who places CIS cases regularly) before you apply matters more than for a standard PAYE purchase. Our lender criteria tables carry the verdict for each lender we've checked, including where we've marked a lender's treatment as unconfirmed rather than invent a policy that isn't published anywhere.

What this means if you're CIS-paid

Because treatment is genuinely inconsistent, the practical reality is that your outcome depends heavily on which lender you (or your broker) approach first. A subcontractor with strong, growing gross pay can be significantly better served by a lender that assesses income closer to the invoiced figure than by one that averages two years of post-deduction profit — and the reverse can be true if your CIS income has been volatile or falling, where an average smooths out a bad year.

Documents worth keeping from day one

Whichever route a lender takes, the paperwork that supports a CIS mortgage application is broadly the same, and it's much easier to gather as you go than to reconstruct under time pressure:

• CIS statements (subcontractor statements) for every payment, showing gross pay, the deduction taken and the net amount paid — most lenders that engage with CIS at all will want to see a recent, continuous run of these.
• Bank statements showing the net payments landing, which lenders cross-check against your CIS statements.
• Your UTR (Unique Taxpayer Reference) and evidence of your CIS registration status, since registered and unregistered deduction rates differ and lenders may ask which applies to you.
• SA302s or tax year overviews from HMRC, or an accountant's certificate, for lenders that route you to self-employed-style underwriting — even if you hope to be assessed on gross pay, having these ready means you're not blocked if a lender insists on them.
• A recent contract or confirmation of ongoing work, since some lenders want reassurance that CIS income is continuing, not a one-off job that's since ended.

When you'll be pushed into full self-employed underwriting

If a lender treats CIS as self-employed income, expect the same requests a sole trader or partnership would face: typically two years of SA302s or accounts, an average (or sometimes the lower) of those two years used as your assessed income, and more scrutiny if your CIS earnings have been rising or falling sharply. If you've only got one year of CIS trading history, that narrows your options further, since most self-employed-style criteria expect at least two years' evidence.

Practical next steps

Because CIS is one of the more inconsistently documented areas of contractor lending, the most useful thing you can do is confirm a lender's actual CIS policy directly — by phone or through a broker — rather than assuming from a tick-box on a criteria matrix. Keep your CIS statements and bank records organised as you go, and compare how different lenders would assess the same income before committing to an application. Our day-rate borrowing calculator is built around day-rate and umbrella contracting rather than CIS specifically, but it's a useful way to see how differently lenders can treat similar gross earnings once annualised, and our lender criteria tables are the place to check a specific lender's verdict — including where we've flagged it as unconfirmed — before you apply.

Update, 13 July 2026: the April 2026 CIS reform doesn't change how mortgages assess CIS income

From 6 April 2026, HMRC is reinstating a set of CIS compliance measures: contractors must again file a nil return for any month they pay no subcontractors (an obligation dropped in 2015), the full late-filing penalty ladder returns, and a new supply-chain fraud measure lets HMRC hold a construction business liable where it "knew or should have known" a transaction was connected to fraud elsewhere in its chain. (Source: GOV.UK.)

This is a tax-administration and anti-fraud reform — it does not change the 20%/30%/0% CIS deduction rates, the gross-payment-status eligibility tests, or any lender's CIS income-assessment basis, all of which remain exactly as described above. The only indirect link worth flagging, and it's a weak one: if your main contractor becomes non-compliant under these tighter rules, it could in principle disrupt the continuity of the CIS statements you rely on as mortgage evidence — a second-order risk to your paperwork trail, not a rule change affecting how any lender assesses CIS income. Nothing above should be read as this reform making CIS mortgages harder or easier to get.

Verified against published lender intermediary criteria pages as of 13 July 2026; several lenders' CIS treatment is not explicitly documented publicly and has been marked as unconfirmed rather than assumed. Criteria change frequently and CIS policies are less standardised than day-rate or umbrella contracting — always confirm the current position directly with the lender or a whole-of-market broker before applying. This article is information, not financial advice.