Accounting software for contractors: the CIS invoice
- CIS deduction on the labour
- £480
- VAT on the invoice
- £0
- Invoice total
- £3,000
- Paid to you after the deduction
- £2,520
Every figure on this page is computed from the inputs entered, by the method stated below it. The two statutory rates the worksheets name, the CIS deduction rate for your status and the UK standard rate of VAT, are read from GOV.UK on the date shown and entered by you; Subbielane publishes no other rate, no allowable-expense rule and no tax computation. The defaults are a worked example to replace with your own figures.
The figures above start from a worked example (£480). Change any input and the answer updates as you type.
Download the Accounting software for contractors: the CIS invoice worked example (CSV)
This is a CIS invoice worksheet, the piece of accounting software for contractors that matters most often: the invoice a subbie raises to a main contractor with the Construction Industry Scheme deduction worked correctly. Labour times your deduction rate is the deduction; materials sit outside it; labour plus materials plus the VAT you charge is the invoice total; the total less the deduction is what is paid to you; and the deduction is what the contractor pays to HMRC against your tax. The deduction rates HMRC sets are 20% for a registered subcontractor, 30% for an unregistered one and 0% with gross payment status, and the UK standard rate of VAT is 20%, both read from GOV.UK; which applies to you is your status, entered by you. Free, on the page, no account; the paid plan keeps every invoice against the client and the tax year.
The deduction, on the labour only
CIS is deducted from the labour element of the invoice, not from the materials the subbie supplied, so the two must be shown separately. £2,400 of labour at 20% is a £480 deduction; £600 of materials carries none. The worksheet takes the split and your rate and returns the deduction, and publishes no rule about which rate is yours.
VAT, if you charge it, and the invoice total
A subbie who is VAT registered and charges VAT on the invoice adds it to labour and materials; one who is not, or whose invoice carries no VAT, enters 0. The worked example charges none, so the invoice total is £3,000. The standard rate is 20% on GOV.UK's VAT rates page; whether it applies to your invoice is a question for HMRC and your accountant.
Paid to you, and held by HMRC
The invoice total less the deduction is what lands in the bank, £2,520 on the worked example, and the £480 deducted is paid by the contractor to HMRC and set against the tax you owe at the year end. The deduction statement the contractor must give you is the proof; the paid plan keeps it matched to the invoice and the payment.
Accounting software for contractors: the CIS invoice: common questions
Is this free accounting software for contractors?
It is a free worksheet, not a ledger: enter labour, materials, your CIS deduction rate and the VAT you charge, and it works the deduction, the VAT, the invoice total, the amount paid to you and the amount held by HMRC on the page with no account and no card. Subbielane Pro keeps every invoice against the client and the tax year with its deduction statement.
Is CIS deducted from materials?
No. The deduction is taken from the labour element; materials the subcontractor supplied are outside it, which is why the invoice shows them separately and the worksheet asks for them separately. What counts as materials on your invoice is a question for HMRC's guidance and your accountant.
Which CIS rate should I enter?
The one HMRC has told you applies: 20% if you are registered, 30% if you are not, 0% if you hold gross payment status, as GOV.UK sets out. The worksheet takes the figure as an input and decides nothing about your status.