Why must I separate labour and materials on a CIS invoice?

CIS deductions apply only to the labour element of your payment, not to materials. By clearly separating labour and materials on your invoice, you ensure the contractor deducts the correct amount. You should be able to evidence materials costs with receipts or supplier invoices if HMRC requests them.

What CIS deduction rate applies to me?

If you are registered with HMRC as a CIS subcontractor, the standard deduction rate is 20%. If you are not registered, the contractor must deduct 30%. If you have applied for and been granted gross payment status by HMRC, you receive payments without deductions (0%). Gross payment status requires meeting certain turnover, compliance, and business tests.

How do I get my CIS deductions back?

CIS deductions are advance payments of your income tax and National Insurance. When you file your Self Assessment tax return at the end of the tax year, the CIS deductions are offset against your total tax liability. If the deductions exceed the tax you owe, you can claim a refund from HMRC. Make sure to keep all CIS payment and deduction statements provided by your contractors.

Do I need to register for CIS as a subcontractor?

Registration is not mandatory, but it is strongly recommended. If you are not registered, the contractor must deduct 30% from your payments instead of 20%. To register, contact HMRC or apply online through your Government Gateway account. You will need your UTR number and National Insurance number.

Does CIS apply to materials I supply?

No. CIS deductions are made only on the labour element of your payment. If you supply materials as part of the job, the cost of those materials is excluded from the CIS deduction calculation. However, you must be able to provide evidence of the materials cost (e.g. supplier receipts) if the contractor or HMRC asks for it.

CIS Subcontractor Invoice Template

Create a compliant Construction Industry Scheme (CIS) invoice with our free template, designed specifically for subcontractors working in the UK construction sector.

FreePDF & Word

Your data stays on your device — nothing is sent to any server.

Your Details

Subcontractor Name / Business Name*

Subcontractor Address*

Phone Number

Email Address

UTR Number*

Your 10-digit Unique Taxpayer Reference

CIS Verification Number*

Provided by HMRC when the contractor verifies your CIS status

National Insurance Number

Recipient Details

Contractor Name / Business Name*

Contractor Address*

Invoice Details

Invoice Number*

Invoice Date*

Tax Month / Week

The CIS tax month the payment falls within

Site Address / Job Location

Line Items

Description of Work*

Labour Amount (£)*

Subject to CIS deduction

Materials Amount (£)

Not subject to CIS deduction

Gross Amount (£)*

CIS Deduction Rate*

CIS Deduction Amount (£)*

Deduction rate applied to labour amount only

Net Payment Due (£)*

Payment Details

Bank Name

Sort Code

Account Number

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CIS SUBCONTRACTOR INVOICE Subcontractor: [subcontractorName] [subcontractorAddress] UTR: [utrNumber] CIS Verification No: [cisVerificationNumber] Contractor: [contractorName] [contractorAddress] Invoice Number: [invoiceNumber] Date: [invoiceDate] -------------------------------------------------- Description of Work -------------------------------------------------- [workDescription] -------------------------------------------------- Breakdown -------------------------------------------------- Labour: £[labourAmount] Gross Amount: £[grossAmount] CIS Deduction at [cisDeductionRate]% (applied to labour only): -£[cisDeductionAmount] ------------------ NET PAYMENT DUE: £[netPayment] Note: CIS deductions are advance payments of tax and National Insurance. The contractor will pay the deducted amount to HMRC on the subcontractor's behalf. The subcontractor can offset these deductions against their tax liability on their Self Assessment return or claim a refund if deductions exceed the tax due.

Important Notes

Legal Disclaimer

The Construction Industry Scheme (CIS) is governed by the Finance Act 2004, Part 3, Chapter 3, and the Income Tax (Construction Industry Scheme) Regulations 2005 (SI 2005/2045). Under CIS, contractors must deduct tax from payments to subcontractors and pass it to HMRC. The deduction rates are: 20% for registered subcontractors, 30% for unregistered subcontractors, and 0% for those with gross payment status. CIS deductions apply only to the labour element of a payment — the cost of materials is not subject to deduction, provided the subcontractor can evidence the materials cost. Contractors must verify all subcontractors with HMRC before making the first payment and must submit monthly CIS returns. Subcontractors can offset CIS deductions against their income tax and National Insurance liability on their Self Assessment return, or claim a refund if deductions exceed the tax owed.

This template is provided for informational purposes only and does not constitute legal advice. For complex legal matters, we recommend consulting a qualified solicitor.

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