If you work under HMRC's Construction Industry Scheme, you already know the frustration. You earn a solid day rate. You've got consistent contracts. But go to a high street bank, and they look at your SA302, see a fraction of what you actually earn, and wonder aloud if you can really afford the house you're sitting in.
The problem isn't your income. The problem is how most lenders read CIS income. The 20% tax deducted at source by your main contractor makes your net pay look like your actual earnings — and for most automated mortgage systems, it is. A CIS subcontractor earning £70,000 gross can appear on paper to earn £56,000. And that's before any legitimate business expenses are accounted for.
This guide exists because most of what's written about CIS mortgages is generic, surface-level, or written by people who've never actually worked with CIS applicants. We have. This is what we've learned.
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What the Construction Industry Scheme Actually Does to Your Mortgage Application
Under CIS, your main contractor deducts 20% from your gross pay before you receive it. That money goes directly to HMRC as an advance payment against your tax bill. When the year ends, you reconcile it through self-assessment — you may get some back, you may owe more, depending on your expenses and profit.
The consequence for mortgage applications is that your payslips and bank statements show the net figure — what arrives in your account. Not your gross earnings. When a high street bank asks for your last three months of payslips, they see the net. When they look at your SA302, they typically see your net profit after deductions.
The reality: if you earn £350/day gross, work 46 weeks a year, 5 days a week, your gross income is £80,500. What most high street lenders see could be significantly less. The difference in maximum borrowing — at a 4.5× multiple — is tens of thousands of pounds.
The CIS Income Gap: A Real Example
At 4.5× income multiple: high street offers up to £234,000. Specialist lender offers up to £362,250. Same person. Same income.
Why Standard Lenders Get CIS Wrong
High street lenders aren't necessarily hostile to CIS contractors. They're just built for something else. Their systems are designed around PAYE income — payslips that match tax codes, P60s that reconcile neatly, and employers they can call. CIS income doesn't fit any of those boxes.
They assess net CIS income, not gross contract rate
Most high street banks use your SA302 figures, which show income after the 20% CIS deduction has been processed. This fundamentally undersells your actual earning capacity.
Irregular contract history triggers automated rejections
Automated systems flag seasonal work gaps, contract changes, or breaks between projects. A human underwriter would understand construction seasonality; an algorithm treats it as income instability.
Multiple CIS contractors on one application are rarely modelled
If both applicants work under CIS, most lenders' systems can't correctly handle the double CIS calculation. Cases like these need manual underwriting.
Industry perception creates invisible headwinds
Construction is seen as cyclically risky. That perception — unfair or not — can affect how borderline applications are decided, even when the individual applicant's track record is strong.
How Specialist Lenders Assess CIS Income
Specialist lenders who understand CIS assess your income the way it should be assessed: from your contract, not your tax return. Here's what they actually look at:
For Sole Trader CIS Contractors
The best specialist lenders will take your gross day rate (before CIS deductions) and annualise it. They'll typically use a formula of: Day Rate × 5 days × 46 weeks — the same approach used for standard contractors. What they're not doing is penalising you for the tax treatment that's completely outside your control.
They'll want to see: your current contract, at least 12 months of CIS history (24 months is more comfortable for mainstream specialist lenders), your SA302s as a supporting document rather than the primary income evidence, and your bank statements showing CIS payments landing.
For Limited Company CIS Contractors
If you operate through a limited company under CIS, you're assessed more like a limited company director. Specialist lenders can look at: salary, dividends, and your share of net profit. This is exactly how Richards & Logic approaches limited company applicants — using the full picture of your company's earnings, not just what's been extracted as personal income.
The advantage of limited company status is that retained profits can also be included by some lenders, which can dramatically increase your assessable income on paper.
Which Lenders Accept CIS Contractor Income?
Not all lenders handle CIS equally. Below is a representative comparison based on publicly available criteria — but be aware that lender criteria change, and your broker should always verify current policy before recommending a specific lender.
| Lender | Assessment Method | History Required | Notes |
|---|---|---|---|
| Halifax | Net CIS income from SA302s | 2 years | Conservative — uses tax return net figures |
| Nationwide | Assessed case-by-case | 2 years | Manual underwriting available for strong cases |
| Accord Mortgages | Contract rate annualised | 12 months | More CIS-friendly — contract rate used |
| Kensington | Gross contract income | 12 months | Specialist lender, CIS-aware criteria |
| Precise Mortgages | Gross day rate × 46 weeks | 12 months | Strong CIS track record, used by specialist brokers |
Lender criteria change regularly. This table reflects general market positioning and should not be treated as definitive current criteria. Always verify with a qualified broker before applying.
Find Out What You Can Actually Borrow as a CIS Contractor
We assess your income the way specialist lenders do — using your gross contract rate, not your tax return. Get a real number in minutes.
What You'll Need to Prepare
A well-prepared CIS application moves fast. A poorly prepared one stalls in underwriting and sometimes generates unnecessary declines that damage your credit file. Here's what to gather before you speak to a broker:
Your current CIS contract
The actual contract document — showing your day rate, the main contractor's name, start date, and ideally an end date at least 3 months in the future. No contract document, no CIS mortgage from most specialist lenders.
12–24 months of CIS payment statements
The CIS deduction statements your main contractor gives you (or that you can pull from HMRC's online portal). These prove your gross earnings history independent of what your SA302 shows.
SA302s and Tax Year Overviews
Last 1–2 years from HMRC. Even if the lender doesn't primarily use these to calculate income, they cross-reference them to confirm you're filing correctly and that your declared income matches what's arriving in your bank account.
3–6 months of business bank statements
Where the CIS payments land. Lenders want to see consistent, regular income deposits. A pattern of regular construction payments from recognisable main contractors is reassuring; sporadic or mixed sources are harder to present.
Accountant-prepared accounts (if limited company)
If you operate via a limited company, you'll need company accounts for the last 1–2 years, your accountant's certificate, and ideally a letter from your accountant confirming your income structure.
A clean credit file
CIS applications get additional scrutiny already. A default, CCJ, or missed payment in the last 3 years will significantly narrow your options. Check your Experian, Equifax, and TransUnion reports before applying and resolve any errors.
Calculating Your Real Borrowing Power
Here's how a specialist broker calculates your income — and by extension, what you can borrow — as a CIS contractor:
Step 1: Take your gross day rate (before CIS deduction).
Step 2: Multiply by 5 working days per week.
Step 3: Multiply by 46 weeks (allowing for 6 weeks holiday/downtime).
Step 4: Apply the lender's income multiple (typically 4.5× to 5×).
For a £400/day CIS contractor: £400 × 5 × 46 = £92,000 assessable income. At 4.5×, you could borrow up to £414,000. At 5×, up to £460,000.
Compare this to a high street lender using your SA302 net profit of, say, £58,000 — they'd offer a maximum of around £261,000 at 4.5×. The difference is £153,000. That is not a rounding error. That is a different house.
Common Mistakes CIS Contractors Make When Applying
We see the same errors repeatedly. Most of them are avoidable with the right guidance in advance.
Applying directly to a high street bank without a broker
The high street will assess you on their criteria. For CIS contractors, those criteria are usually wrong. You get a decline or a significantly undervalued offer, both of which have consequences.
Using a broker who doesn't specialise in CIS
A generalist mortgage broker may know that CIS contractors exist but may not know which specific lenders have the most CIS-friendly criteria, or how to present your gross contract rate as the primary income evidence.
Applying without a current contract in place
No current contract means no income evidence for the near term. If your current contract ended 3 months ago and you're between projects, most specialist lenders will want to see a new contract before proceeding.
Getting a mortgage in principle from the wrong lender
A declined or too-low mortgage in principle from a high street bank creates a footprint on your credit file. Multiple applications do more damage. Understand your options before making any applications.
Not sure what you can borrow?
Our free Logic Check takes 60 seconds and gives you an honest view of your maximum borrowing as a CIS contractor — no obligation, no hard sell.
Frequently Asked Questions
Related Guides
Your Contract Rate Is Your Income. We Treat It That Way.
Richards & Logic provides regulated mortgage advice through Hayden Richards, CeMAP-qualified authorised adviser of Echo Finance Limited. We know CIS income. We know which lenders assess it correctly. And we know how to get you the mortgage your earnings actually support.
Your home may be repossessed if you do not keep up repayments on your mortgage.