Setting Up a CIS Subcontractor

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