CIS Mortgages: Specialist Mortgage Advice for Construction Industry Scheme Workers

The Construction Industry Scheme (CIS) is a tax framework used across the UK building and construction industry. Under CIS, contractors deduct tax at source from payments made to subcontractors before passing the remainder on. This means CIS workers receive income net of tax deductions, rather than as gross pay or as trading income after expenses.

This creates a specific and well-known problem when applying for a mortgage. Many standard lenders look at bank statements and see only the net income after CIS deductions, leading them to significantly underestimate a subcontractor's true earning capacity. In practice, a CIS worker earning well above the average UK wage can find themselves offered a mortgage based on a figure that bears little resemblance to what they actually earn.

The solution is not to accept that position as fixed, but to work with an adviser who understands how CIS income works and knows which lenders are willing and able to assess it properly. At J Finance, we have helped CIS workers across the construction industry secure mortgages that reflect their real earnings, and we know exactly how to approach these applications.

How Do Lenders Assess CIS Income?

This is the most important question for any CIS worker applying for a mortgage, and the answer varies considerably between lenders.

The Net Income Problem

Standard lenders using bank statements as their primary income evidence will typically see only the net amount after CIS deductions. At the standard 20% deduction rate, this means assessing income based on just 80% of gross earnings; at the higher 30% rate, the gap is even larger.

Using Gross CIS Earnings

A growing number of lenders accommodate CIS workers by using gross earnings before deductions, typically requiring CIS statements showing gross payments, deductions, and net amounts over six to twelve months. This produces the most favourable assessment for most CIS workers.

Using Self-Assessment Tax Returns

Some lenders use the income figure on your self-assessment tax return. This can help where returns are current and show strong earnings, though net profit after expenses may be lower than gross CIS earnings.

How Much History Is Required

Most lenders want a minimum of twelve months of CIS trading history, though some will accept six months in specific circumstances. A longer track record generally supports a stronger application.

Who Do We Help?

  • Bricklayers, plasterers, and general builders working as subcontractors under CIS
  • Electricians and plumbers registered under CIS for construction site work
  • Carpenters, joiners, roofers, scaffolders, and specialist tradespeople
  • Civil engineering and groundworks contractors
  • Painting and decorating subcontractors
  • Labourers and general site workers paid through CIS
  • Sole traders working in construction who are registered for CIS deductions
  • CIS workers who also have some employed or self-employed income alongside their CIS earnings
  • Limited company directors in construction where the company operates under CIS

Common Challenges for CIS Mortgage Applicants

Seasonal or Variable Income

Construction income may vary significantly between summer and winter months. We work with lenders who take an annualised view and are comfortable with natural seasonal variation.

Gaps Between Contracts

Brief gaps are normal in construction and don't necessarily indicate instability. We identify lenders who understand contract-based employment and present work patterns clearly.

Mixed CIS and Employed Income

Combining CIS subcontracting with periods of direct employment requires careful presentation of both income streams to avoid confusion in the lender's assessment.

CIS Through a Limited Company

Where the business operates through a limited company registered under CIS, the assessment becomes similar to a company director's, needing salary, dividends, and CIS statements presented correctly.

Recently Registered Under CIS

If you have recently moved from employment into CIS subcontracting, your trading history may be shorter than typically required. We identify lenders more flexible on minimum history.

What Documents Will I Need?

  • CIS payment and deduction statements from your contractor or contractors, covering at least the last twelve months, showing gross payments, deductions, and net amounts received
  • Business bank statements for the last three to six months, showing income deposits and business expenditure
  • Personal bank statements for the last three months, showing living costs and existing financial commitments
  • Self-assessment tax returns and SA302 tax calculations for the last one to two years, where required by the lender
  • Evidence of upcoming contracts or forward bookings where available, to help demonstrate ongoing income continuity
  • Standard identity and address documentation required by all lenders

How the CIS Mortgage Process Works

1
Understanding Your Income and Circumstances We start with a thorough conversation about how you work, your CIS registration, your income history, and what you are looking to achieve.
2
Lender Selection We identify the lenders most favourable to CIS income, specifically those prepared to assess gross CIS earnings rather than net receipts, often the single most impactful decision in the process.
3
Documentation Preparation We advise you on what documents are required and help you gather and present them effectively, ensuring CIS statements are clear and complete.
4
Application Submission and Management We prepare and submit your application, handle lender queries, and keep you updated throughout underwriting.
5
Offer and Completion Once your mortgage offer is issued, we help you understand the terms and any conditions attached, and support you through to completion.

Tips for CIS Workers Applying for a Mortgage

  • Keep your CIS statements organised and accessible, as they are the most important document for CIS mortgage applications. Contact your contractor to request replacements if any are missing.
  • Ensure your self-assessment tax returns are up to date, since some lenders rely on them as their primary income evidence.
  • Maintain a clear business bank account, keeping CIS income separate from personal spending to make income patterns easier to demonstrate.
  • Do not approach multiple lenders simultaneously, as each application leaves a credit footprint. Work with an adviser who identifies the right lender first.
  • Build your CIS trading history where possible before applying, as twelve months or more of consistent earnings widens the range of products available.
  • Be prepared to evidence future work where possible, such as a letter of intent from a contractor, to strengthen an application.

Get Started with J Finance

We work with CIS contractors and construction industry subcontractors across the UK, helping them present their income correctly and access mortgage products that reflect their true earning capacity. Appointments are available by phone, video, or face-to-face at our Newbury office, with out-of-hours slots available on request. To arrange a no-obligation conversation, call us on 01635 521300 or email contact@jfinance.co.uk.