How to Create a CIS Invoice: UK Guide 2026

If you're a subcontractor working in the UK construction industry, getting your CIS invoices right isn't optional — it's essential. A dodgy invoice can delay your payment, cause headaches at tax time, and even land you in trouble with HMRC.

But here's the thing: CIS invoicing doesn't have to be complicated. Once you understand what needs to go on there and why, it becomes second nature.

In this guide, we'll walk you through everything you need to know about creating a proper CIS invoice in 2026 — from what the Construction Industry Scheme actually is, to a line-by-line breakdown of what your invoice should include.

What Is the Construction Industry Scheme (CIS)?

The Construction Industry Scheme is HMRC's system for collecting tax from people working in construction. Rather than waiting until the end of the tax year for subcontractors to pay their tax bill, the scheme requires contractors to deduct tax at source and send it directly to HMRC.

Think of it like PAYE, but for self-employed construction workers.

The scheme covers most construction work in the UK, including:

• Building and repairs
• Decorating and painting
• Demolition and dismantling
• Plumbing, heating and electrical work
• Roofing and scaffolding
• Road building and civil engineering

It does not cover things like architecture, surveying, or the delivery of materials (unless you're also doing the installation).

Who Needs to Use CIS Invoices?

If you're a subcontractor doing construction work for a contractor, you need to issue CIS-compliant invoices.

A "contractor" in CIS terms isn't just a building firm. It includes:

• Construction companies
• Property developers
• Government departments and local authorities
• Housing associations
• Any business that spends more than £3 million on construction in a 12-month period (even if construction isn't their main business)

So if you're a plumber doing a bathroom refit for a housing association, or an electrician wiring a new office for a large company — CIS applies to you.

Do You Need to Be Registered?

Both contractors and subcontractors should register for CIS with HMRC. Here's why it matters:

• Registered subcontractors have 20% deducted from the labour portion of their invoices
• Unregistered subcontractors have 30% deducted — that's a significant difference
• Gross payment status means 0% deduction (but you need a clean tax record and minimum turnover to qualify)

You can register for CIS online through your Government Gateway account. It's free and straightforward.

What to Include on a CIS Invoice

This is where most people trip up. A CIS invoice needs everything a standard invoice does, plus some CIS-specific details. Here's the complete list:

Standard Invoice Details

1. Your name or business name — as registered with HMRC
2. Your contact details — address, phone number, email
3. Your UTR (Unique Taxpayer Reference) — this is essential for CIS
4. Your VAT number (if VAT registered)
5. The contractor's name and address
6. A unique invoice number — sequential, no gaps
7. The invoice date
8. A description of the work carried out — be specific (e.g., "First fix plumbing — Plot 7, Phase 2" not just "plumbing work")
9. The date or period the work was done

CIS-Specific Details

10. Labour costs — shown separately from materials
11. Materials costs — also shown separately (CIS deductions only apply to labour, not materials)
12. The CIS deduction rate — 20%, 30%, or 0%
13. The CIS deduction amount — calculated on the labour portion only
14. The net amount payable — after the deduction

Payment Details

15. Your bank details — sort code, account number, account name
16. Payment terms — e.g., "Payment due within 30 days"
17. The total amount due

How CIS Deductions Work: A Worked Example

Let's make this concrete. Say you're a registered subcontractor and you've just finished a plastering job. Your invoice looks like this:

The contractor pays you £870 and sends the £180 to HMRC on your behalf. That £180 counts as a tax credit — it's money already paid towards your tax bill.

What About VAT?

If you're VAT registered, it gets slightly more involved. CIS deductions are calculated before VAT is added. So:

Important: the VAT is calculated on the full amount (labour + materials), not on the amount after CIS deduction. The CIS deduction and VAT are separate calculations.

CIS Invoice Example Layout

Here's what a complete CIS invoice might look like:

─────────────────────────────────────────────
INVOICE

[Your Name / Trading Name]
[Your Address]
[Phone] | [Email]
UTR: 12345 67890
VAT No: GB 123 4567 89 (if applicable)

TO:
[Contractor Name]
[Contractor Address]

Invoice No: INV-2026-047
Date: 18 February 2026
Work Period: 10–14 February 2026
Site: 42 New Build Road, Manchester

─────────────────────────────────────────────
DESCRIPTION                          AMOUNT

Labour: First fix electrical,        £1,200.00
        Plot 12 — wiring, back
        boxes, consumer unit

Materials: Cable, back boxes,          £340.00
           consumer unit, clips

─────────────────────────────────────────────
Subtotal                             £1,540.00
CIS Deduction (20% of £1,200)        -£240.00
Net after CIS                        £1,300.00
VAT (20% of £1,540)*                  £308.00
─────────────────────────────────────────────
TOTAL PAYABLE                        £1,608.00

*Or state reverse charge applies if applicable

Payment Terms: 14 days
Bank: [Name] | Sort: 12-34-56 | Acc: 12345678
─────────────────────────────────────────────

Common CIS Invoice Mistakes (and How to Avoid Them)

Over the years, we've seen the same mistakes crop up again and again. Here are the big ones:

1. Not Separating Labour and Materials

This is the most common error. If you lump everything together as one figure, the contractor has to deduct CIS from the entire amount — including your materials. That means you're losing money unnecessarily.

Always break your invoice into labour and materials. Keep receipts for materials in case HMRC asks.

2. Forgetting Your UTR Number

Without your UTR, the contractor can't verify you with HMRC. That means they'll either have to deduct at 30% (the unregistered rate) or delay your payment until they can verify you.

3. Using Vague Descriptions

"Building work — £2,000" won't cut it. HMRC expects reasonable detail. Include:

• What work was done
• Where it was done (site address)
• When it was done
• Which plot/phase/area (for larger sites)

4. Getting the VAT Reverse Charge Wrong

Since the domestic reverse charge was introduced, this has been a constant source of confusion. If you're supplying CIS-regulated services to another VAT-registered contractor (who is not the end user), the reverse charge likely applies. Get it wrong and you could face penalties.

5. Inconsistent Invoice Numbering

Your invoice numbers need to be sequential. Gaps or duplicates can trigger questions from HMRC during an inspection. Pick a system (e.g., INV-2026-001, INV-2026-002) and stick with it.

6. Not Keeping Copies

You need to keep copies of every invoice you issue for at least six years. Digital copies are fine — in fact, they're better because they're easier to search and harder to lose.

How to Make CIS Invoicing Easier

Let's be honest — most tradespeople didn't get into the trade to do paperwork. But invoicing is one of those non-negotiable tasks that directly affects your income.

Here are some practical tips:

Use a template. Whether it's a spreadsheet or an app, having a consistent template means you won't forget key details.

Invoice immediately. The sooner you send your invoice, the sooner you get paid. Waiting until the end of the month (or worse, when you "get around to it") delays everything.

Go digital. Paper invoices get lost. Email or app-based invoices create an automatic record and are easier for contractors to process.

Automate the calculations. CIS deduction maths isn't hard, but doing it manually on every invoice is tedious and error-prone. This is where tools like YapMate come in handy — you dictate the details of your job, and it handles the CIS calculations automatically, generating a professional invoice you can send straight away.

Keep your CIS registration up to date. If your details change (name, address, business structure), update HMRC promptly to avoid verification issues.

What Happens to Your CIS Deductions?

The money deducted from your invoices isn't gone — it's a credit against your tax bill. When you file your Self Assessment tax return, you declare all your income and claim back the CIS deductions already paid.

If the deductions exceed your tax liability (which can happen, especially if you have significant allowable expenses), you'll get a refund from HMRC.

Make sure you:

• Keep all your payment and deduction statements from contractors
• Reconcile them against your invoices
• Declare the correct figures on your tax return

If a contractor hasn't given you a payment and deduction statement, chase them — you're legally entitled to one within 14 days of the end of each tax month.

Frequently Asked Questions

Do I need to put CIS deductions on my invoice?

Strictly speaking, the contractor is responsible for calculating and making the deduction. However, it's best practice to show the deduction on your invoice so both parties are clear on the expected payment. It also reduces disputes.

Can I invoice for CIS work without being registered?

Yes, but the contractor must deduct 30% instead of 20%. You're essentially losing an extra 10% of your labour income up front. Register — it's free and takes minutes.

What if I have gross payment status?

If HMRC has granted you gross payment status, the contractor deducts 0%. Your invoice should still show the CIS information, but the deduction line will be £0.00. You'll need to pay your full tax liability through Self Assessment.

How long should I keep CIS invoices?

HMRC requires you to keep records for at least 5 years after the 31 January submission deadline of the relevant tax year. In practice, keeping records for 6 years is safer.

Wrapping Up

Creating a proper CIS invoice isn't difficult once you know what's required. The key points are:

• Separate labour and materials — always
• Include your UTR — every time
• Show the CIS deduction — clearly
• Be specific about the work done
• Invoice promptly — don't wait

Getting this right means faster payments, fewer queries, and a much easier time when Self Assessment rolls around.

If you're tired of fiddling with spreadsheets on site, give YapMate a try. Just tell it what work you've done, and it creates a professional, CIS-compliant invoice in seconds. It's built specifically for UK tradespeople who'd rather be working than doing admin.