How to Write a CIS Invoice (UK Guide for Subcontractors)

If you work as a subcontractor in the UK construction industry, you need to understand the Construction Industry Scheme (CIS) and how it affects your invoices. Getting your CIS invoice right means fewer payment delays and less hassle at tax time.

This guide walks you through exactly what a CIS invoice is, what it needs to include, and how to create one quickly using InvoiceJob's free invoice generator.

What Is the Construction Industry Scheme (CIS)?

CIS is a scheme run by HMRC that requires contractors to deduct tax from payments they make to subcontractors. The contractor then passes those deductions to HMRC on your behalf. Think of it as tax being collected at source — similar to PAYE but for construction workers.

As a subcontractor, you don't deduct CIS yourself. Your contractor does. But your invoice needs to clearly show the breakdown so the contractor knows how much to deduct and how much to pay you.

CIS Deduction Rates

There are three CIS deduction rates, depending on your registration status with HMRC:

• 20% — the standard rate for registered subcontractors
• 30% — applies if you're not registered with HMRC for CIS
• 0% (gross payment status) — if you've applied for and been granted gross payment status

CIS deductions are only applied to the labour portion of your invoice. Materials are not subject to CIS deductions.

What to Include on a CIS Invoice

A CIS invoice includes everything a standard UK invoice requires, plus some additional CIS-specific information:

• Your name or business name and address
• Your UTR (Unique Taxpayer Reference) number
• Your VAT number (if VAT registered)
• The contractor's name and address
• A unique invoice number
• The invoice date
• A clear description of the work carried out
• Labour and materials listed separately — this is critical because CIS only applies to labour
• The CIS deduction rate and amount (for information — the contractor actually makes the deduction)
• The net amount payable after CIS deduction
• Your bank details for payment

CIS Invoice Example

Here's what a simple CIS invoice might look like for a plasterer who completed a job with both labour and materials:

Notice how the CIS deduction is only calculated on the £2,000 labour amount, not the £350 materials. This is why separating labour and materials on your invoice is essential.

What About VAT and the Domestic Reverse Charge?

If both you and your contractor are VAT registered, and the work falls under CIS, you'll likely need to apply the domestic reverse charge for VAT. This has been in place since March 2021.

Under the reverse charge, you don't charge VAT on your invoice. Instead, you include a note stating:

"VAT domestic reverse charge applies. Customer to account for VAT at the appropriate rate."

The reverse charge does not apply if you're supplying services to an end user (for example, a homeowner having their house renovated). In that case, charge VAT as normal.

If you're not sure whether the reverse charge applies to your situation, check with your accountant or visit the HMRC guidance on the domestic reverse charge.

Common CIS Invoice Mistakes

• Not separating labour and materials — if you lump everything together, the contractor may deduct CIS from the full amount, costing you money
• Missing your UTR number — without this, the contractor can't verify you with HMRC and may have to deduct at the higher 30% rate
• Forgetting the reverse charge note — if you charge VAT when you shouldn't, you'll need to issue a credit note and redo the invoice
• Not keeping copies — you need your CIS invoices and the contractor's payment statements for your Self Assessment tax return

Getting Your CIS Deductions Back

CIS deductions are advance payments towards your income tax and National Insurance. When you file your Self Assessment tax return, the CIS deductions your contractors have made are offset against your tax bill. If your contractors have deducted more than you owe, you'll get a refund from HMRC.

To claim your deductions back, you'll need the payment and deduction statements your contractor is legally required to give you within 14 days of each payment.

Create Your CIS Invoice for Free

You can create a professional CIS invoice in under two minutes using InvoiceJob. Just fill in your details, list your labour and materials separately, and download it as a PDF. No signup required.

If you're new to invoicing, you might also find our guide on how to invoice as a self-employed sole trader helpful.