How to invoice as a CIS subcontractor UK (2026): 20%/30%, labour vs materials, verification
How to invoice as a CIS subcontractor UK (2026): 20%/30%, labour vs materials, verification
By InvoiceAdept Team22 March 2026Updated 29 August 202614 min read
Two documents get confused under the Construction Industry Scheme, and most thin blogs mash them into one “CIS invoice”.
The subcontractor sends a bill: labour, materials, VAT or reverse charge, UTR, the work, the site. The contractor does not invoice the subcontractor back. The contractor verifies you with HMRC, pays you after taking CIS off the labour, gives you a payment and deduction statement, and files a monthly return (CIS300) with HMRC. InvoiceAdept prints the CIS lines on Pro+. It does not file CIS300. It does not file Making Tax Digital updates to HMRC.
This is the working CIS invoice for 2026: who sends what, the 20% / 30% / 0% rates, labour versus materials, verification, and how reverse charge sits on the same PDF.
InvoiceAdept is invoicing software from Tech Me Today Ltd, Companies House 15917255, ICO ZB944663. Free is five invoices a month. Pro is £7.99 (WhatsApp send, Stripe with no extra InvoiceAdept platform fee). Pro+ is £12.99 and is the CIS plan. Figures in the tables are worked examples, not a price list. This is general information, not tax advice. The scheme explainer for 2026 sits at the construction industry scheme CIS guide. The invoice you actually send is this page.
In short
Register as a CIS subcontractor so the contractor can verify you at 20% instead of 30%. Invoice the gross. Split labour and materials. CIS comes off labour only, after VAT, materials, plant hire for the job, consumable stores and on-site fuel (not travelling) are taken out. If you are both VAT-registered and reverse charge applies, show the VAT and do not add it to what they pay.
You do not deduct CIS yourself. The contractor does, using the rate HMRC gave them when they verified you. You should still print the expected deduction so their accounts team knows what to pay. Keep every payment and deduction statement they must send within 14 days of the end of each tax month.
If you are the contractor hiring the subbie, skip to “What the contractor does”. You still do not invoice them for their own labour. You pay them.
Who invoices whom
Subcontractor (you, if you are the subbie) | Contractor (you, if you hire subbies) | |
|---|---|---|
Document you raise | Invoice to the contractor for the work | You do not invoice the subcontractor for CIS. You pay their invoice. |
What HMRC wants from you on that document | Gross labour, materials, VAT or reverse-charge wording, UTR, description | Nothing on your invoice to them. CIS is a deduction from their invoice. |
What you must still do | Register, give the exact legal name and UTR you registered with | Verify before first payment; deduct; statement; monthly return |
CIS300 | You do not file it | You file it. InvoiceAdept does not. |
The old “how to invoice subcontractors” page walked contractors through putting a UTR on an invoice they send. That is backwards. The subcontractor’s invoice is the source document. The contractor’s legal paperwork is the verification, the deduction, the statement, and the monthly return.
If you only ever bill homeowners, CIS is not on that invoice. An ordinary householder is not a CIS contractor. Use the how to invoice a client walkthrough and the electrician or plumber templates. Come back here when a main contractor is paying you.
Register, then get verified — those are different steps
GOV.UK, what you must do as a CIS subcontractor: if you work for a contractor as a sole trader, company owner, or partner, you should register. Under CIS the contractor deducts 20% and passes it to HMRC as an advance towards your tax and National Insurance. If you do not register, they must deduct 30%.
Registration is free. It is not the same as verification. Verification is the contractor’s job, before they pay you the first time.
GOV.UK, verify subcontractors: before paying a new subcontractor, the contractor verifies you with HMRC. HMRC then tells them whether you are registered and which rate to use, or whether they can pay you without deduction (gross payment status). They must verify you again if they have not included you on a CIS return in the current or last two tax years.
Give them the details that exactly match the details you used to register:
Sole trader: UTR and National Insurance number (not a temporary number starting TN)
Company: company name, company UTR, company registration number
Partnership: nominated partner, trading name, partnership UTR
A trading name that does not match is how a registered subbie still gets 30% for a month. The contractor cannot pick a rate because you asked nicely. HMRC sets it at verification.
Gross payment status (0%) is a separate application. You still register for CIS. HMRC has turnover, compliance and business tests. Most new sole traders will not have it. Do not print 0% on an invoice because you would like it.
Many UK tradespeople also find it helpful to review How to invoice subcontractors UK CIS at this stage.
The three rates, and what they sit on
From GOV.UK, make deductions and pay subcontractors:
Status after verification | CIS rate | What the contractor does |
|---|---|---|
Registered, net payment | 20% | Deducts 20% of the CIS base; pays you the rest; pays the deduction to HMRC |
Not registered / cannot verify | 30% | Deducts 30% of the CIS base |
Gross payment status | 0% | Pays the invoice without CIS deduction; still reports the payment |
The CIS base is not “the invoice total”. The contractor starts with the gross amount of your invoice, then takes off:
VAT
equipment which is now unusable (consumable stores)
fuel used, except for travelling
equipment hired for this job (plant hire)
manufacturing or prefabricating materials
materials, only if you paid for them directly
They can ask for receipts. If you have none, they estimate. Then they apply 20%, 30% or 0% to what is left.
Two habits that cost money:
One line, “first-fix £3,500”. A cautious contractor deducts 20% of £3,500, including the cable and the board. You are light until Self Assessment.
Stuffing mark-up into “materials”. HMRC’s rule is the direct cost you actually paid. A £180 merchant ticket against a £350 materials line is how they estimate, and the estimate is rarely in your favour. The extra is labour for CIS.
Materials the contractor issued from their own stores are not your materials. You did not pay for them. Leave them off.
CIS is on InvoiceAdept Pro+, not Free, not Pro. The feature page is CIS invoices. Printing the deduction is not filing CIS300.
What the subcontractor puts on the invoice
Start with a proper UK invoice. GOV.UK’s invoicing overview is the baseline: if both of you are VAT-registered you must give an invoice that says how much they pay and when. VAT Notice 700 is the full VAT invoice. Then add the CIS lines. Do not delete one set to make room for the other.
Field | Homeowner (no CIS) | Contractor, CIS, you charge VAT | Contractor, CIS + reverse charge |
|---|---|---|---|
Your legal name and address | Yes | Yes | Yes |
Their name, address, site / PO | Yes | Yes | Yes |
Unique number and dates | Yes | Yes | Yes |
Description that identifies the work | Yes | Yes | Yes |
Labour and materials split | Useful | Required | Required |
Your 10-digit UTR | No | Yes | Yes |
VAT number, rate, VAT in sterling | If you are registered | Yes, and you add VAT to the total | Yes — show it, do not add it |
Reverse charge wording | No | No | Required: the words “reverse charge” |
CIS rate, deduction, net payable | No | Show expected 0 / 20 / 30 on labour | Same |
How to pay | Sort code or card | Sort code. Card is rare | Sort code |
The first-time field list is how to invoice for the first time in the UK. This page is the CIS overlay.
You can show the expected CIS deduction as a line. That helps the contractor’s accounts team. It does not mean you have deducted the tax. They have. If they verify you at 30% because your company name did not match, their deduction wins, not your PDF.
If you are not VAT-registered, do not charge VAT and do not decorate the invoice with “VAT: N/A”. The registration threshold is £90,000 of taxable turnover — GOV.UK, how VAT works.
What the contractor puts on — and what they send you instead
The contractor’s invoice, if they raise one at all, is to their customer (the client, the developer, the householder). CIS does not live on that document as a deduction from you.
What the contractor must do, from GOV.UK:
Register as a CIS contractor before taking on the first subcontractor. Construction businesses that pay subcontractors, and some non-construction businesses that spend more than £3 million on construction, are in — contractor overview.
Check employment status. Paying someone as a subcontractor who should be an employee can mean a penalty.
Verify the subcontractor with HMRC before the first payment, and again if they have been off the returns for two tax years.
Deduct at the rate HMRC gave them, on the CIS base, not on VAT, not on qualifying materials.
Give a payment and deduction statement within 14 days of the end of each tax month if they made deductions. GOV.UK’s example: tax month 6 May to 5 June, statement by 19 June.
File the monthly return and pay the deductions to HMRC. HMRC’s internal manual CISR72020 names that return CIS300. Deductions must reach HMRC by the 19th following the tax month, or the 22nd if paid electronically.
None of that is an invoice from the contractor to the subbie. If you are a contractor using InvoiceAdept, Pro+ will help you see labour versus materials on incoming style invoices you raise when you are the subbie yourself. It will not submit CIS300. Use HMRC’s CIS online service or commercial CIS software for the return.
Reverse charge overlap — VAT is not CIS
CIS withholds income tax. Reverse charge moves VAT onto the customer’s return. Both can sit on the same PDF. Mixing them is how people deduct 20% off VAT, or add VAT to a reverse-charge total.
HMRC’s supplier test — how to use the reverse charge if you supply building and construction services — is all of these, not some:
You are VAT-registered in the UK
The customer is VAT-registered in the UK
Payment for the supply is reported within CIS
The services are standard- or reduced-rated (see VAT Notice 708 for the rate)
You are not an employment business supplying staff or workers
The customer has not given written confirmation that they are an end user or intermediary supplier
If any one fails, do not reverse-charge that invoice. Believing they are an end user is not enough. HMRC says if they have not notified you in writing, and the other conditions are met, you still apply the reverse charge.
On a supply-and-fix, reverse charge usually sits on the full net value — labour and the materials that come with the construction service. CIS ignores materials. Split the lines so both calculations are visible. Show the VAT they must account for. Do not add it to the payable total. Use the words reverse charge. HMRC examples: “VAT Act 1994 Section 55A applies”, “Customer to pay the VAT to HMRC”. Invoice-level walkthrough: domestic reverse charge invoice UK.
Private householders are not VAT-registered. Reverse charge never applies to them. Charge VAT if you are registered.
A contractor working for a householder is still a contractor. There is no reverse charge on the supply to the private customer. That does not turn the contractor into an end user for the subbies underneath. If you are billing that contractor, reverse charge can still apply.
If you are sorting this alongside other compliance work, read VAT invoice requirements UK 2026.
Worked example: one job, four invoices
A self-employed electrician, CIS-registered and verified at 20%, first-fixes a commercial site for a main contractor.
Labour: £3,000
Materials the electrician bought for this job (receipts exist): £500
VAT at 20% on the £3,500 construction supply would be £700
These numbers are a worked example, not a quote.
A — Homeowner, you are not VAT-registered (no CIS, no reverse charge)
This is here so you can see what not to send a contractor.
Line | Amount |
|---|---|
Labour | £3,000.00 |
Materials | £500.00 |
Amount the customer pays you | £3,500.00 |
No UTR. No CIS. No VAT line.
B — VAT-registered contractor, you charge VAT (written end-user notice), CIS 20%
They have sent the written end-user wording. Reverse charge is off. CIS is still on.
Line | Amount |
|---|---|
Labour | £3,000.00 |
Materials (this job only) | £500.00 |
Subtotal | £3,500.00 |
VAT at 20% (you charge it) | £700.00 |
CIS deduction (20% of labour £3,000) | −£600.00 |
Amount the contractor pays you | £3,600.00 |
CIS is calculated after VAT is stripped out of the deduction base, on labour only: 20% × £3,000 = £600. You now hold £700 of VAT, which you pay to HMRC on your VAT return. The contractor remits £600 CIS against your UTR.
An older version of this page added VAT and then deducted CIS as if the customer were a construction company without asking whether reverse charge applied. On a typical builder-to-builder supply that is the wrong invoice. Use B only when they have given the written notice, or when reverse charge otherwise fails the HMRC test.
C — Same contractor, reverse charge applies, you are verified at 20%
No end-user notice. Both VAT-registered. Payment reported under CIS. Standard-rated work.
Line | Amount |
|---|---|
Labour | £3,000.00 |
Materials | £500.00 |
Subtotal (VAT-exclusive) | £3,500.00 |
VAT at 20% — reverse charge, customer accounts | £700.00 (not charged) |
CIS deduction (20% of labour £3,000) | −£600.00 |
Amount the contractor pays you | £2,900.00 |
Wording: “Reverse charge: VAT Act 1994 Section 55A applies. Customer to pay the VAT to HMRC.”
What happens to the money:
Contractor pays you £2,900
Contractor remits £600 CIS to HMRC against your UTR
Contractor accounts for £700 reverse-charge VAT on their own return (and usually reclaims it there)
You do not receive, and do not pay over, that £700
If you had dumped £3,500 in one line, a cautious contractor deducts 20% of the lot and you are £100 light on the materials until Self Assessment.
D — Same contractor, reverse charge, you are not CIS-registered (30%)
Line | Amount |
|---|---|
Labour | £3,000.00 |
Materials | £500.00 |
Subtotal | £3,500.00 |
VAT at 20% — reverse charge, customer accounts | £700.00 (not charged) |
CIS deduction (30% of labour £3,000) | −£900.00 |
Amount the contractor pays you | £2,600.00 |
That extra £300 stays out of your account until Self Assessment. Registering for CIS is free. Doing the job unverified is how you lend HMRC 10% of your labour for a year. Reverse charge does not fix that.
Deposits under CIS
A deposit from a contractor is still a CIS payment if it is for construction operations. Invoice it, split labour and materials, apply the same rate. If you are VAT-registered, the deposit is a tax point when you invoice it or receive it, whichever is first — GOV.UK, VAT on deposits. If reverse charge applies, it applies to the deposit too. The deposit template is deposit invoice template UK.
Payment and deduction statements, and your Self Assessment
Every time the contractor deducts, they must give you a statement within 14 days of the end of the tax month. Keep it. It is how you prove the tax already paid when you complete Self Assessment. Reconcile it to your invoice: gross, materials, deduction, net paid. If the deduction is wrong, raise it with them before the month is closed — they have a CIS300 to file.
CIS deductions are not an extra tax. They are an advance. If more was deducted than you owe, you reclaim the difference through Self Assessment. If less, you pay the rest. InvoiceAdept does not file that return either.
HMRC’s contractor guidance also lets a contractor ask for the scheme to be made inactive if they will not pay subcontractors for up to six months. That is their return problem, not yours.
Late pay, when the contractor is a business
If they miss the due date on your invoice, the commercial late-payment rules apply: statutory interest at 8% plus Bank of England Bank Rate, and a fixed recovery sum of £40, £70 or £100 depending on the size of the debt — charging interest and recovery costs. Bank Rate is 3.75% as of the Bank of England’s 30 July 2026 decision; check the live rate before you write a chasing letter. You cannot use a lower rate against a public authority. If your contract already sets a different interest rate, that rate applies instead.
Put a due date on the invoice. Seven or fourteen days is common on labour. If you never agree a date, GOV.UK treats the payment as late 30 days after they get the invoice, or after you finish the work if that is later.
Related: see CIS explained UK subcontractors for practical next steps.
What InvoiceAdept will and will not do
Free | Pro £7.99 | Pro+ £12.99 | |
|---|---|---|---|
Invoices per month | 5 | Unlimited | Unlimited |
CIS labour / materials / 0–20–30 lines | No | No | Yes |
WhatsApp send | Share a PDF yourself | Yes | Yes |
Stripe, no extra InvoiceAdept platform fee | Card not on Free | Yes | Yes |
Files CIS300 | No | No | No |
Files MTD to HMRC | No | No | No |
Prices exclude VAT; checked against pricing on 29 August 2026. InvoiceFree puts CIS on its free plan. That is a real difference. Do not pick InvoiceAdept Pro and expect the deduction lines. If five invoices is enough to try the template, start on Free. If this month’s contractor work needs CIS on the PDF, that is Pro+.
We do not decide whether your customer is an end user. We do not apply a hidden 5% reverse-charge disregard. We do not verify subcontractors with HMRC.
Mistakes that delay a CIS invoice
Billing a householder with a 20% CIS line.
One lump sum, so 20% comes off the materials.
Charging VAT when reverse charge applies — or reverse-charging a homeowner.
No UTR, or a trading name that does not match registration, then 30%.
The contractor “invoicing” the subbie for CIS instead of paying the subbie’s invoice and issuing a statement.
Assuming the invoicing app files CIS300. InvoiceAdept does not. InvoiceFree does not.
Waiting until Sunday to invoice a week you finished on Tuesday.
Worth pairing this with our guide to Best CIS invoice software UK 2026.
Frequently asked questions
What should a CIS subcontractor put on the invoice?
Legal name and address, contractor name and address, unique number, dates, a description that identifies the work and the site, labour and materials split, UTR, the expected CIS rate and deduction, net payable, and VAT or reverse-charge wording if you are VAT-registered. You invoice the gross. The contractor deducts.
How is the CIS deduction calculated?
Gross invoice, minus VAT, minus qualifying materials / plant hire for the job / consumable stores / on-site fuel, then 20%, 30% or 0% on what is left. GOV.UK deduction steps. A mark-up is not a material.
Do CIS deductions apply to materials?
No. Only if you paid for them directly and the contractor is satisfied — receipts help. If you do not split them, they may deduct from the lot.
Should I include my UTR?
Yes, on a contractor invoice. It is how they verify you. It does not belong on a homeowner invoice as decoration.
Do I include VAT on a CIS invoice?
If you are VAT-registered and reverse charge does not apply, charge VAT on the full net (labour + materials) and take CIS off labour only. If reverse charge applies, show the VAT and do not add it to the total. If you are not registered, do not charge VAT. Threshold: £90,000.
Who files CIS300?
The contractor. Monthly. InvoiceAdept does not file it. The subcontractor keeps payment and deduction statements and deals with the deductions on Self Assessment.
How does verification work?
The contractor verifies you with HMRC before the first payment, using the free CIS online service or commercial software. HMRC returns the rate. Details must match your registration exactly. GOV.UK, verify subcontractors.
Does InvoiceAdept file CIS or Making Tax Digital?
No. Pro+ prints CIS on the invoice. Filing is HMRC or software on HMRC’s list.
About this guide
InvoiceAdept is invoicing software for UK trades, operated by Tech Me Today Ltd, Companies House 15917255, ICO registration ZB944663. We raise invoices, including CIS on Pro+. We do not file your CIS300, your VAT return, or your Making Tax Digital updates to HMRC.
Last reviewed: 29 August 2026. Tax rules change. Check the GOV.UK pages linked above before you rely on a rate or a form of words.
This guide is general information for UK tradespeople. It is not tax, legal or accounting advice.
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