CIS Mortgages: How Lenders Assess Construction Income

Yes, you can get a mortgage on CIS income. Most lenders treat you as a sole trader and use the net profit from your tax return, but a smaller group use your gross pay from your CIS statements, which can mean a much higher income figure.

Under the Construction Industry Scheme (CIS), your contractor deducts tax from your pay before you receive it. For mortgage purposes that puts you somewhere between employed and self-employed, and lenders split on how to treat you.

The net profit figure is what is left after you claim for tools, van, fuel and materials. For many tradespeople, the gross figure is far higher, so the lender you pick can change your budget by tens of thousands of pounds.

For the full picture, see our self-employed mortgage guide.

Can you get a mortgage on CIS income?

Yes, from a wide range of lenders. Most will ask for one or two years of tax returns and use your net profit. A smaller number will use gross pay from recent CIS statements, sometimes after only a few months of work. Being on CIS does not by itself mean a higher rate. Your deposit and credit history matter more.

How does CIS work?

• Contractors deduct 20% from the labour part of your pay if you are registered for CIS, or 30% if you are not.
• If you have gross payment status, nothing is deducted and you pay your tax through Self Assessment.
• The deductions count as advance payments towards your tax and National Insurance bill. You reclaim any overpayment through your tax return, and many tradespeople receive a refund.

You can check the rules on GOV.UK’s CIS guidance for subcontractors.

What are the two ways lenders assess CIS income?

	Net profit method	Gross CIS method
Income used	Net profit from your SA302 or tax calculation	Gross pay from CIS statements, often annualised
Evidence	Usually one to two years of tax returns	Often 3 to 12 months of CIS statements and bank statements
Expenses	Already deducted, so income is lower	Not deducted in the same way
Who offers it	Most lenders	A smaller number of lenders

Lenders using the gross method usually look at your recent CIS statements and bank statements, check the pay is regular, and then annualise it. Some allow for a few weeks’ unpaid holiday or gaps between jobs. Exactly how they annualise, and how many months they need, varies.

The gross method is not automatically better. Lenders using it may have stricter rules on how long you have worked in construction, gaps in work or the type of contract, and they still check your spending and credit. If your net profit is close to your gross pay, a mainstream lender using your tax return may offer a better rate.

Which situations do lenders see most?

These are illustrative situations, not Option Finance client outcomes.

How long do you need to have worked under CIS?

• Gross CIS lenders: often want 3 to 12 months of continuous CIS statements, and some ask for a longer history in the trade.
• Net profit lenders: usually want one or two years of tax returns, the same as other self-employed applicants. See our one-year accounts guide.

If you moved from PAYE employment in the same trade to CIS, lenders often view that more favourably than a move into a new line of work. If you have very little history so far, our guide to a self-employed mortgage with no accounts covers the other routes.

What documents do you need?

• CIS payment and deduction statements from each contractor, usually for the most recent 3 to 12 months
• Bank statements for the same period, so the lender can match the payments
• SA302 tax calculations and tax year overviews, particularly for net profit lenders or if you have been on CIS for longer. GOV.UK explains how to get your SA302 and tax year overview
• Your UTR number and evidence of CIS registration
• Photo ID, proof of address and proof of your deposit

Missing statements are the most common cause of delay. Ask each contractor for any you do not have before you apply. Your CIS statements and bank credits need to tell the same story.

What can cause problems?

• Gaps in work. Short, normal gaps between jobs are usually fine. Long unexplained gaps can lead a lender to reduce the income it uses.
• Working through a limited company. If you are a director of your own company paid under CIS, lenders usually assess you as a company director instead. See our limited company director guide.
• Paid through an umbrella company. That is employment rather than CIS. Some lenders treat umbrella pay like an employed salary. Our temporary contract mortgage guide covers employed contract work.
• Past credit problems. Late payments during quiet periods are common in the trades. See our self-employed bad credit guide.

What deposit and rate can you expect?

CIS income does not by itself mean a higher rate. Your deposit, credit history and the lender decide that. Some lenders accept a 5% deposit from CIS workers, although the choice of lenders and rates improves at 10% and above.

If you are buying your first home, our first-time buyer mortgage advice covers deposits, schemes and costs.

Can you remortgage or buy to let on CIS income?

When your deal ends, a product transfer with your current lender usually needs no new income check. If you move lender or borrow more, the CIS assessment applies again, so choose a lender that uses the method that suits you. Our guide to remortgaging when self-employed explains the options.

For buy-to-let, lending depends mainly on the rent, but many lenders also set a minimum personal income, which your CIS income can count towards.

Frequently asked questions

Speak to Option Finance about your CIS mortgage

We will tell you straight how lenders would read your CIS income on both methods, which ones fit and what to get together before you apply.

Book a free initial consultation using the enquiry form below. See our self-employed mortgage advice and our contractor mortgage guide.