Question 1

What is a CIS invoice?

Accepted Answer

A CIS (Construction Industry Scheme) invoice is raised by a subcontractor to a contractor. It must clearly separate labour and materials, because CIS deductions only apply to the labour element. The contractor deducts the CIS tax from the labour total and pays it to HMRC on the subcontractor's behalf, then pays the subcontractor the remaining amount.

Question 2

What CIS deduction rate should I use?

Accepted Answer

Use 20% if you are registered with HMRC under CIS. Use 30% if you are not registered (your contractor will also use 30% if they cannot verify you). Use 0% if HMRC has granted you gross payment status — meaning your contractor pays you in full and you settle your tax directly.

Question 3

Do CIS deductions apply to materials?

Accepted Answer

No. CIS deductions only apply to the labour portion of your invoice. If you supply materials, list them separately as Materials on your invoice and the contractor will not deduct anything from that amount.

Question 4

Does my CIS invoice need to include my UTR?

Accepted Answer

Yes. Your contractor needs your UTR (Unique Taxpayer Reference) to verify your registration status with HMRC before they can pay you at the 20% rate rather than 30%. Always include your UTR on CIS invoices.

Question 5

Should I charge VAT on a CIS invoice?

Accepted Answer

Only if you are VAT registered. Note that from March 2021, the domestic reverse charge applies to most construction services — meaning VAT-registered subcontractors working for VAT-registered contractors do NOT charge VAT on their invoices. The contractor accounts for VAT instead. Check whether reverse charge applies to your work before adding VAT.

Question 6

What is a CIS payment and deduction statement?

Accepted Answer

A payment and deduction statement is a document your contractor must give you within 14 days of the end of each tax month. It confirms how much they paid you, how much was deducted, and the deduction rate used. Keep these — you use them to reclaim overpaid tax via Self Assessment or a CIS refund claim.

Free CIS Invoice Generator: Construction Industry Scheme