What is a CIS Invoice?
A CIS invoice is a standard invoice issued by a subcontractor to a contractor under the Construction Industry Scheme. The key difference from a regular invoice is that it must clearly separate labour from materials so the contractor can calculate the correct CIS deduction — which applies only to labour, not materials.
Getting the format right matters. An unclear or incorrect invoice creates problems for both parties: the contractor may deduct the wrong amount, and HMRC may question the records.
What Must a CIS Invoice Include?
A valid CIS invoice must contain all of the following:
1. Your Name and Address
Your full legal name (or business name) and address. If trading through a limited company, use the registered company name and address.
2. Your UTR Number
Your Unique Taxpayer Reference (10 digits). This is essential — without it, the contractor cannot verify you with HMRC and will default to the 30% deduction rate.
3. Invoice Number
A unique, sequential invoice number for your own records and the contractor's bookkeeping. Start with INV-001 and increment from there.
4. Invoice Date
The date you issued the invoice.
5. Payment Due Date
Most CIS invoices use 14 or 30 day payment terms. State this clearly: "Payment due within 30 days" or give a specific date.
6. Description of Work
A clear description of what was done. Be specific: "Brickwork — Phase 1, Plots 1-4, Residential Development" is better than just "Construction work."
7. Labour Amount (Separate Line)
The cost of labour only, shown as a separate line item. This is what the CIS deduction is calculated on.
8. Materials Amount (Separate Line, if applicable)
If you have supplied materials, list them separately from labour. Include the actual cost of materials — not a marked-up figure, as CIS is supposed to apply to cost price.
9. CIS Deduction Rate and Amount
Show clearly:
- The CIS rate being applied (0%, 20%, or 30%)
- The calculated deduction amount (rate × labour amount)
10. Net Amount Due
The amount the contractor will actually pay you: Labour + Materials − CIS Deduction = Net Payable
11. VAT (if VAT registered)
If you are VAT registered, add VAT at the appropriate rate (usually 20%). Note: VAT is calculated on the full invoice amount (labour + materials), not just the net after CIS deduction. If the domestic reverse charge applies, state this clearly on the invoice — see below.
12. Bank Details
Your bank account number and sort code for payment. Include your account name.
CIS Invoice Template: Example
Here is a complete example of a correctly formatted CIS invoice:
INVOICE
From: John Smith Plastering Address: 12 Builder's Way, Manchester, M1 2AB UTR: 1234567890 Invoice No: INV-0047 Date: 1 June 2026 Payment Due: 1 July 2026
To: Redwood Construction Ltd, 45 High Street, Manchester, M2 3CD
Description: Skim plastering — Plots 7-12, Phase 2 Residential Development
| Description | Amount |
|---|---|
| Labour — Plastering works | £2,400.00 |
| Materials — Plaster, beads | £320.00 |
| Subtotal | £2,720.00 |
| CIS Deduction (20% on labour only) | −£480.00 |
| Net Payable | £2,240.00 |
Bank: Barclays · Sort code: 20-00-00 · Account: 12345678
CIS + VAT: The Combinations
If you are VAT registered, VAT sits on top of the invoice — but the VAT amount and the CIS deduction are calculated independently.
Example with VAT:
- Labour: £2,000
- Materials: £500
- Subtotal: £2,500
- VAT (20% on full subtotal): £500
- CIS Deduction (20% on labour): −£400
- Net payable: £2,100 (contractor pays you £2,100 and separately pays £400 CIS to HMRC and accounts for £500 VAT)
If the Domestic Reverse Charge applies, you do not charge VAT at all. Instead you write on the invoice: "Domestic Reverse Charge — customer to account for VAT to HMRC at rate shown." The contractor accounts for the VAT themselves.
Common CIS Invoice Mistakes
Mixing Labour and Materials
The most common mistake. Always show labour and materials as separate line items. If you submit a single combined total, the contractor has no way of knowing what to deduct CIS from — and many will deduct from the full amount, overcharging you.
Forgetting Your UTR
Without your UTR, the contractor cannot verify you. They will apply the 30% deduction rate. Always include your UTR on every invoice.
Wrong CIS Rate
If the contractor has verified you at 20%, make sure your invoice shows 20%. The contractor's records must match.
Inflating Materials
CIS deductions apply to the actual cost of materials, not a marked-up figure. HMRC can challenge inflated material amounts as an attempt to reduce CIS liability.
No Invoice Number
Without a sequential invoice number, your records look unprofessional and can cause problems at Self Assessment time.
Do You Need to Issue a CIS Invoice?
Yes — as a subcontractor you are responsible for issuing the invoice. The contractor does not create the invoice for you. They will issue you a Payment and Deduction Statement (PDS) after paying, showing what they deducted — but the invoice comes from you first.
Using FlashBill for CIS Invoices
FlashBill generates fully compliant CIS invoices automatically. You enter your labour and materials, select your CIS rate, and FlashBill calculates everything — including VAT if applicable. Invoices are sent as professional PDFs by email, and you can accept online payment via Stripe, Apple Pay, or Google Pay.