## Setting Up a CIS Subcontractor Before you can record CIS deductions, you need to set up the subcontractor as a supplier with CIS details. ### Step 1: Create or Edit a Supplier 1. Go to **Contacts > Suppliers** 2. Either create a new supplier or edit an existing one 3. Click the **CIS** tab ### Step 2: Enable CIS 1. Toggle **CIS Subcontractor** to on 2. Enter the subcontractor's **UTR** (Unique Taxpayer Reference) — this is a 10-digit number 3. Select the **Tax Treatment**: - **Gross (0%)** — for subcontractors registered for gross payment status - **Net (20%)** — for registered subcontractors (most common) - **Higher Rate (30%)** — for unregistered subcontractors 4. Save the supplier ### Step 3: Verification (Optional) If you've verified the subcontractor with HMRC, a verification status indicator will appear on the CIS tab showing when they were last verified. ### What the UTR Is Used For The Unique Taxpayer Reference (UTR) is essential for: - HMRC CIS returns (required for each subcontractor) - CIS payment and deduction statements - Verifying the subcontractor's CIS registration status ### Important Notes - You should verify every subcontractor with HMRC before making the first payment - Tax treatment can change — HMRC may notify you of a different rate after verification - If a subcontractor fails verification, they default to the 30% higher rate - Keep UTR records up to date — incorrect UTRs will cause CIS return rejections