## 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 1. Go to **Documents > Bills > New Bill** 2. 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: 1. **Labour Cost** — Enter the amount of the payment that is for labour/services 2. **Materials Cost** — Enter the amount for materials supplied by the subcontractor 3. **Deduction Rate** — Pre-filled from the supplier's tax treatment, but you can override it 4. **Deduction Amount** — Automatically calculated: Labour Cost x Deduction Rate 5. **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