What gets deducted
| Your status | Deduction from labour |
|---|---|
| Registered with CIS | 20% |
| Not registered | 30% |
| Gross payment status | None - paid in full |
The deduction comes off the labour part only, not off materials you bought for the job. It counts as tax you have already paid, and you claim it back against your tax bill on your return.
What to show on the invoice
- Your name and UTR, and the contractor's name
- Invoice number, date and the job address
- Labour and materials as two separate amounts - this matters, because only labour is deducted
- VAT, if you are VAT registered (see below)
- The total before the deduction and the amount you expect to receive after it
Work the figures out first with the CIS calculator, then put them on a free CIS invoice template or the free invoice generator.
JobGuard keeps labour, materials and payments of each job together, so the invoice is ready the day you finish.
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VAT and the reverse charge
If you are VAT registered and supply most construction work to another VAT-registered contractor, the domestic reverse charge usually applies: you do not charge VAT, the contractor accounts for it. The invoice then says so. The rules have exceptions, so check with your accountant or HMRC before your first one.
Keep the contractor's statements
Each month the contractor should give you a payment and deduction statement. Keep every one and match it against your invoices. If a deduction is missing from the statement, ask for it to be corrected - HMRC will only credit what the contractor reported.
Want the rates and a worked example? See CIS deductions explained. Paid late or short? See what to do when a client will not pay.
General information for England and Wales, not legal or tax advice. For your own situation, speak to a solicitor, accountant or Citizens Advice.