Set up a contact as a contractor for CIS

Set up new or existing contacts as contractors so CIS can be deducted from sales invoices.

  • Set a default CIS ledger account on a contact, to make sure CIS is always deducted automatically and prevent errors.
  • Choose to allow reverse charge VAT to be applied to relevant transactions created for a contact.

Once a contact is set up for CIS it can't be disabled. If your contact is no longer a contractor or subcontractor, you can still send invoices without CIS deductions. Just use the standard ledger accounts so that CIS deductions aren't applied.

What you need to know

  • Make sure you activate CIS before you set up CIS on your contacts.
  • Set up contacts as CIS contractors to allow CIS to be deducted from invoices. The required ledger accounts are only available to CIS contacts.

  • Set VAT registered contacts to use reverse charge VAT, where applicable, so VAT can be applied correctly to their invoices. Read more about reverse charge VAT for CIS.
  • Existing sales invoices for an existing contact are not automatically updated to apply CIS deductions.
  • Once a contact is set up for CIS it can't be disabled. If your contact is no longer a contractor or subcontractor, you can still send invoices without CIS deductions. Just use the standard ledger accounts so that CIS deductions aren't applied .
  • You can only set CIS on contacts with a UK address and currency set to Pound sterling.

  • Consider setting the default ledger account to a CIS Labour account. This is a good way to prevent errors, as the CIS ledger account is always selected when creating an invoice.

Set up a contact as a contractor (customer)

  1. From Contacts, select Customers then New Customer.

    For an existing contact, select the pencil icon next to contact.

  2. For new contacts, add the contact details as required. For more information see Create a customer contact.
  3. From the Account Details or Options tab
    1. VAT Reverse Charge - For VAT registered contacts this allows reverse charge VAT to be applied to appropriate invoices.
    2. Set the Account Default to a CIS Labour ledger account. This helps prevent errors and ensure CIS deduction are made on invoices, as this ledger account is set automatically when invoices are entered. CIS ledger accounts are only visible to CIS registered contacts.

      For existing contacts, this is on the Options tab.

  4. From the CIS tab, select CIS Registered checkbox. This indicates that the contact is using the CIS scheme and the appropriate ledger accounts can be selected.
  5. Save the contact.

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