Why CIS Subcontractors Are Often Under-Lent
If you work in construction under the Construction Industry Scheme (CIS), your contractor deducts 20% tax before you are paid and sends it to HMRC. At the end of the year you file a self-assessment tax return, claim back expenses such as your van, fuel, tools, workwear and phone, and often receive a refund. The problem is that most high-street lenders then assess you on the net profit shown on your SA302, which, after all those legitimate expenses, can be roughly half of what you actually invoice.
Specialist and some mainstream lenders take a different approach. They treat CIS subcontractors much like employed workers on a day rate and use your gross CIS remittance slips, the figure before the 20% deduction, annualised across a working year. For bricklayers, groundworkers, carpenters, plasterers, scaffolders, roofers, electricians and plumbers across East Sussex and Kent, that can transform what you can borrow.
Worked £ Example: Gross CIS vs SA302 Net Profit
Take a groundworker in Hastings earning a steady £2,000 per week gross on CIS.
- Gross CIS route: £2,000 × 46 weeks = £92,000; £2,000 × 48 weeks = £96,000. At 4.5x, that is roughly £414,000 to £432,000 of potential borrowing.
- SA302 route: after van finance, diesel, tools, insurance and other expenses, the tax return shows £48,000 net profit. At 4.5x, that is roughly £216,000.
Same person, same work, same bank account, yet one lender offers almost double the other. Lenders differ on how many weeks they annualise over (commonly 46 or 48 to allow for holidays and weather), and some will average the most recent weeks if your rate varies. Affordability, credit commitments and your deposit still matter, but the starting income figure is far stronger.
How Much History Do You Need?
With the right lender, you do not need two years of tax returns. Many CIS-friendly lenders need only 3 to 6 months of CIS statements (payment and deduction statements), ideally supported by matching personal bank statements showing the money arriving. Some will want 12 months of continuous work in the industry, which can include time previously employed in construction. If you have just moved from PAYE to CIS doing the same trade, you may be able to apply almost straight away.
Typical documents
- 3 to 6 months of CIS remittance or payment and deduction statements.
- Matching personal bank statements.
- Your latest SA302 and Tax Year Overview, if you have one, to show your history.
- Photo ID and proof of address.
- Proof of deposit.
5%–10% Deposit Options for Every Type of Buyer
Gross CIS income can be used across most mortgage types, often with a deposit of just 5% to 10%:
- First-time buyers: 5% deposit mortgages are available to CIS subcontractors with good credit, sometimes alongside new-build or shared ownership schemes.
- Home movers: moving up the ladder using your gross CIS figure rather than your reduced net profit.
- Remortgages: releasing equity or securing a better rate when your current deal ends, especially if your last lender only used SA302 figures.
- Buy-to-let: most BTL lending is based on rent, but many lenders require a minimum personal income, which gross CIS can satisfy.
Switching Between Sole Trader CIS and Limited Company CIS
Many subcontractors eventually incorporate. Once you work through a limited company, your company may be paid gross (if it holds gross payment status) or have deductions taken at company level, and lenders usually move from CIS-slip assessment to director income (salary plus dividends, or salary plus share of profit). If you switch, timing matters: applying shortly before incorporating, or using a lender that accepts continuity of trade, avoids a gap in your provable history.
Our director and 1-year self-employed guide explains how retained profits and incorporation are assessed once you become a limited company. For the wider picture, see our self-employed, director and CIS mortgage guide for East Sussex.
What Underwriters Look For
- Consistency: regular weekly or monthly CIS payments, not sporadic one-off jobs.
- Continuity: ideally 12 months in the trade, even across different contractors.
- A clean credit profile, although some specialist lenders accept minor adverse credit.
- Sensible commitments such as van finance, which is fine as long as it is affordable.
Gaps between contracts are normal in construction. A short explanation and evidence of your next contract usually reassures underwriters. Where income is seasonal, we may choose a lender that averages a longer period to smooth out quieter winter months.
Why Use a Specialist Broker?
Applying to the wrong lender can mean a decline and an unnecessary credit search. Our specialist mortgage brokers know which lenders use gross CIS figures, how many weeks they annualise, and how much history they accept, so your case is presented correctly first time.
A Second Worked Example: Variable Day Rates
Not every subcontractor earns the same each week. Consider a roofer in Eastbourne whose last 13 weeks of CIS slips show gross pay between £1,100 and £1,700, averaging £1,400. A lender annualising the 13-week average over 46 weeks would use £64,400; at 4.5x that is roughly £289,800. His SA302 net profit, after a new van and scaffold hire, was just £31,000, which at 4.5x gives only £139,500. Even with variable income, the gross CIS route more than doubles his starting borrowing figure. Some lenders will instead take the lower of the average and the latest month, so choosing the right lender for your pattern of pay matters.
Where a contractor works for several main contractors, lenders generally want to see all of the CIS statements together and evidence that the work is continuous. Short breaks between jobs are usually acceptable; long unexplained gaps are what underwriters query.
Frequently Asked Questions
Can I get a mortgage using gross CIS income?
Yes. A number of lenders assess the gross figure on your CIS statements, annualised over 46 to 48 weeks, rather than the net profit on your SA302.
How many CIS payslips do I need?
Many lenders accept 3 to 6 months of CIS statements, supported by bank statements. You do not always need two years of tax returns.
Can I buy with a 5% deposit as a CIS contractor?
Yes. First-time buyers and home movers with good credit can access 5% to 10% deposit mortgages using gross CIS income.
What if I am moving from CIS sole trader to a limited company?
Lenders will usually switch to assessing your director income. Timing your application or using a continuity-of-trade lender avoids a gap.
Do I need income protection as a subcontractor?
It is strongly recommended, as you have no employer sick pay. Income protection can pay a monthly benefit if you cannot work.
Every case we place is reviewed by a CeMAP-qualified adviser before a single credit search is run, so your file goes to the lender most likely to say yes first time. Contact Transparent Mortgage Services for a free, no-obligation review of your figures. Your home may be repossessed if you do not keep up repayments on your mortgage.
