Recording CIS Bills
Create bills with CIS deductions that split labour and materials
Recording CIS Bills
When you receive an invoice from a CIS subcontractor, create a bill with the CIS deduction automatically calculated.
Creating a CIS Bill
- Go to Documents > Bills > New Bill
- Select a supplier that is marked as a CIS subcontractor
When you select a CIS subcontractor, the CIS deduction section appears automatically on the right-hand side of the bill form.
Entering CIS Details
The CIS section shows:
- Labour Cost — Enter the amount of the payment that is for labour/services
- Materials Cost — Enter the amount for materials supplied by the subcontractor
- Deduction Rate — Pre-filled from the supplier's tax treatment, but you can override it
- Deduction Amount — Automatically calculated: Labour Cost x Deduction Rate
- Net Payment — The amount you actually pay the subcontractor: Total - Deduction
Example
A subcontractor submits an invoice for £5,000:
- Labour: £3,500
- Materials: £1,500
- Tax treatment: Net (20%)
| Item | Amount |
|---|---|
| Total invoice | £5,000 |
| Labour cost | £3,500 |
| Materials cost | £1,500 |
| CIS deduction (20% of £3,500) | £700 |
| Net payment to subcontractor | £4,300 |
You pay the subcontractor £4,300 and pay the £700 deduction to HMRC.
Adding Line Items
Add your bill line items as normal (e.g. "Construction work - Labour" and "Construction work - Materials"). The CIS section on the sidebar is separate from the line items — it records how much of the total relates to labour vs materials for CIS deduction purposes.
Important Notes
- CIS deductions only apply to the labour portion, never to materials
- The bill total remains the full amount (labour + materials) — the CIS deduction tracks what you withhold for HMRC
- Make sure the labour + materials roughly corresponds to the bill total
- CIS bills can be automatically imported into CIS returns