If you work in the construction industry as a subcontractor under the Construction Industry Scheme, you have likely experienced the frustration of approaching a lender and being met with confusion, a decline, or an offer that bears no relationship to what you actually earn.
The CIS mortgage problem is well-known in the specialist broker market and almost entirely avoidable with the right approach. This guide explains why it happens and what the solution looks like.
What the Construction Industry Scheme is
The Construction Industry Scheme is a tax arrangement that requires contractors in the construction industry to deduct money from a subcontractor's payments and pass it to HMRC. These deductions count as advance payments toward the subcontractor's tax and National Insurance liability.
Under CIS, subcontractors are not employees. They are self-employed and responsible for their own tax affairs. But the way their income is processed creates a specific challenge when it comes to mortgage applications.
Why CIS income creates mortgage problems
The challenge arises because CIS subcontractors sit in an awkward position between employed and self-employed, and lenders who do not know the market well tend to misclassify them.
Some lenders treat CIS workers as self-employed and ask for two years of SA302 tax returns. The problem is that the net income declared on a CIS worker's SA302 is often significantly lower than their gross earning capacity, because of the deductions made at source and the way the income is processed.
Other lenders try to treat CIS workers as employed and ask for payslips. The CIS payslips they produce show deductions made by the contractor, which confuse lenders who are not familiar with the scheme.
The result is either a declined application or an offer based on a fraction of the worker's actual earning capacity.
How specialist lenders assess CIS income
Specialist lenders who understand the CIS market have developed a different approach. Rather than relying on SA302 income or standard payslips, they assess CIS workers on their gross contract income.
This means looking at the total amount invoiced or received before any CIS deductions, and using that figure to calculate affordability. The difference between gross and net CIS income can be substantial, and the difference in borrowing potential between the two approaches is equally significant.
To use gross CIS income for assessment, lenders will typically want to see twelve months of CIS payslips or statements showing the gross contract income, bank statements confirming the income, and confirmation of CIS registration.
What documentation you will need
The documentation requirements vary between specialist CIS lenders, but most will ask for the following: twelve months of CIS payment and deduction statements from the contractor; three to six months of bank statements showing the CIS income being received; proof of CIS registration; and evidence of your self-assessment registration with HMRC.
Some lenders will also want to see your most recent self-assessment tax return, though the focus for income assessment will typically be on the gross CIS figures rather than the net declared income.
How long do you need to have been working under CIS?
Most specialist CIS lenders require twelve months of CIS history. Some will consider less where the applicant has a strong track record in the construction industry and can demonstrate continuity of work. If you have recently registered under CIS after working in construction in another capacity, this context is worth presenting clearly.
Frequently asked questions
Can I get a mortgage as a CIS subcontractor?
Yes. Specialist lenders assess CIS income on a gross basis, which typically produces a significantly better outcome than standard lender approaches. The key is working with a broker who knows which lenders understand CIS.
Do lenders use my gross or net CIS income?
Specialist CIS lenders will typically use your gross CIS income for affordability assessment. Standard lenders tend to use your net declared income from your SA302, which usually produces a much lower figure.
How many months of CIS payslips do I need?
Most lenders require twelve months of CIS statements. Some will consider less in the right circumstances. The more evidence of consistent income you can provide, the stronger the application.
What if I have recently started working under CIS?
If you have recently registered under CIS but have a background in construction, it is worth presenting your full employment and self-employment history to a specialist broker who can assess which lenders are most likely to consider your situation.
Last updated: 10 May 2026