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CIS Notes

CIS: Notes for Subcontractors

As a subcontractor covered by the construction industry scheme, your invoice should include a deduction for tax and NICs. To create this invoice, click menu File > New > Invoice.

Enter the usual details for an invoice, then enter another invoice line for the CIS deduction:

CIS Invoice

There are several points to note about the CIS deduction line:
  • The Description should start with 'CIS Deduction' and include the rate as a percentage.
  • The deduction should be entered as a negative amount
  • If you are registered for VAT, the VAT Rate should be '0%'
  • The account to use depends on your type of business. If you are self-employed or in a partnership, the account should be 'Owner's Drawings and Personal Use'. For a company the account should be 'Income Tax and NI Liability'.

You can periodically reclaim these deductions from HMRC - for self-employed people this will happen when you complete your annual income tax return. To find out the total CIS amounts deducted from customer payments, click menu Window > Reports, then select the 'CIS Deducted By Customers' report.
Note that this report is based on payments made by customers - if an invoice is unpaid it will not affect this report.

CIS Customer Report