Record a CIS invoice from subcontractor

What you need to know

Set up CIS for your business to make sure the correct CIS ledger accounts are added to your chart of accounts.
Set up your CIS contacts as subcontractor
CIS deductions are only calculated on invoices where a CIS Labour Expense ledger account is used.
The CIS deduction is applied to the net amount of the CIS labour, exclusive of VAT.

Select Purchases and then Purchase Invoices.
Select New Invoice.
Choose a contact that is set up for CIS (once selected, you'll see a blue banner advising your contact is set up for CIS and CIS deductions will apply to your invoice).
If applicable, select Use Reverse Charge VAT.

When to use reverse charge VAT

The invoice you receive from your subcontractor will show when reverse charge VAT has been applied.

Reverse charge VAT is applied to all invoices for the supply of certain services under the CIS scheme. For a full list, see the Gov.uk website VAT domestic reverse charge for building and construction services

Remember that the reverse charge applies to theses services plus any construction materials used directly for those services.
Enter the CIS labour amount on a separate line.
- Choose a CIS Labour Expense ledger account where applicable to ensure your CIS is recorded correctly.
- CIS deductions are only taken from lines recorded against a CIS labour ledger account.
- If you’ve set a default on your contact, this will be selected automatically.
Enter the purchase of any materials connected with CIS on a separate line.
1. Choose a CIS Materials ledger account.
Your invoice will show the total charges for the labour and materials, the CIS deductions and the VAT being amount being reversed where applicable.
Once you're happy with your invoice, select Save.

Next Steps