How to invoice as a subcontractor

Invoicing as a subcontractor is like any other invoice, with one twist: if you work under the Construction Industry Scheme, the contractor deducts CIS tax from your labour before paying you. Get the layout right and payment is smooth; get it wrong and the deduction gets argued over. Here's the whole process, and a generator that does the labour-and-materials split for you.

Skip the manual maths

Enter labour and materials; it works out the 20% or 30% deduction and opens a finished CIS invoice. Free, no signup.

Open the CIS generator →

Step by step

Agree the price first

Before the job starts, send a quote or estimate so the contractor has agreed the figure. It heads off disputes and gives you something to invoice against. If you need one, a quote template takes a minute.
Put the required details on the invoice

Your name or business name, address and contact details; the contractor's name and the site or project; a unique invoice number; the invoice date; and a clear description of the work. If you're VAT-registered, your VAT number too. This is the same baseline as any invoice's required details.
Split labour from materials

This is the CIS-specific part. Put your labour on one line and any materials you paid for directly on a separate line. The split matters because the deduction applies to labour only — never to materials. Keep the receipts for the materials.
Apply the CIS deduction

The contractor deducts 20% if you're registered with HMRC for the scheme, or 30% if you're not, from the labour figure (excluding VAT). Many subcontractors show this as a "less CIS deduction" line so the net to pay is obvious. The formal record is the contractor's payment and deduction statement, which they must give you within 14 days of the tax month end.
Handle VAT and the reverse charge

If both you and the contractor are VAT-registered, most construction services fall under the domestic reverse charge: you don't add VAT, and you note that the customer accounts for it. Whatever the VAT position, the CIS deduction is always calculated on the amount excluding VAT.
Set clear payment terms, then send and keep a copy

Write the due date in full ("payment due by 30 August") rather than "30 days", and note how you want to be paid. Send the PDF, and keep your copy plus every deduction statement — they're your proof of tax already paid when you do your Self Assessment.

A worked example

Say you're registered, your labour is £2,000 and you bought £450 of materials for the job:

labour £2,000 × 20% = £400 CIS deducted → £2,000 + £450 − £400 = £2,050 net paid to you

The materials aren't touched by the deduction; only the labour is. Open this example in the editor → and change the numbers to yours, or use the generator to pick 20% vs 30% automatically.

If the contractor pays late

A CIS deduction doesn't change your right to be paid on time. For a business-to-business debt you can add statutory interest and a fixed recovery fee once the payment is overdue — our late-payment interest calculator works out the exact figures and adds them to a demand.

Common questions

How do I invoice as a subcontractor under CIS?

Invoice as normal — your details, the contractor's, an invoice number, date and description — but split labour and materials onto separate lines, then show the CIS deduction (20% if registered, 30% if not) taken from the labour only. The net payable is labour plus materials minus the deduction. VAT, if any, is kept out of the figure the deduction is calculated on.

Do I charge VAT on a CIS invoice?

If you and the contractor are both VAT-registered, most construction services fall under the domestic reverse charge, so you don't add VAT and you note that the customer accounts for it. If you're not VAT-registered, there's no VAT to add. Either way the CIS deduction is worked out on the amount excluding VAT.

Is the CIS deduction taken from materials?

No. The deduction applies only to your labour. Materials you paid for directly are taken off first, which is why the invoice splits them onto their own line. Keep the receipts to back up the materials figure.

Do I need special software to invoice as a subcontractor?

No. A correctly laid-out invoice is all HMRC expects. This site's free CIS generator does the labour-and-materials split and the 20%/30% deduction for you and exports a PDF, with no account and nothing uploaded.