CIS income gross-up explained
CIS-friendly lenders assess you on your gross posted income — the figure before the 20% deduction at source — rather than the net profit on your tax return. That ‘gross-up’ usually supports a noticeably larger mortgage, because it values your work before tax rather than the reduced profit left after it.
What ‘gross-up’ means
Under the Construction Industry Scheme your contractor deducts tax at source — 20% if registered — and pays it to HMRC. CIS-aware lenders take your gross payslip figure (before that deduction) and average recent months to estimate annual income, rather than using the lower net-profit figure from self-assessment.
It’s a more accurate picture of what you earn, and it usually means more borrowing.
Gross vs net in numbers
The gross-up effect
Net profit on self-assessment: £38,000
Self-employed basis at 4.5×: ≈ £171,000
CIS gross basis at 4.5×: ≈ £270,000
Same work — assessed on gross posted income, the borrowing rises substantially.
What you’ll need
- Three to six months of CIS payslips or statements.
- Personal bank statements.
- Proof of CIS registration where applicable.
- Gross-up uses income before the 20% deduction.
- It typically beats a net-profit assessment.
- A few months’ payslips can be enough — full accounts aren’t always needed.
- Placement with a CIS-friendly lender is key.
CIS, answered
Why is gross income better than my tax return?+
Your tax return shows net profit after expenses, which understates your earning power. Gross posted income — before the 20% deduction — is higher and gives a fairer basis for borrowing.
Do I need full accounts as a CIS worker?+
Often not. Many CIS-friendly lenders average recent payslips instead of requiring two or three years of finalised accounts, which helps if you’re newly subcontracting.
What if I’m not CIS-registered?+
Unregistered subcontractors have 30% deducted rather than 20%, and the lender pool is smaller. Registering generally improves both your take-home and your mortgage options.