CIS Invoice Template: How to Invoice Under CIS in 2026

Quick answer: A CIS invoice template is a construction invoice that splits labour from materials and shows the Construction Industry Scheme deduction: 20% of labour for registered subcontractors, 30% if unregistered, nothing with gross payment status. If both parties are VAT registered, it usually also needs domestic reverse charge wording instead of charging VAT.

Invoicing under CIS trips up many tradespeople because three different rules meet on one page: the CIS deduction, materials that are excluded from it, and VAT that may or may not be reverse charged. Get it wrong and you either get paid the wrong amount or create a VAT problem for your contractor. This guide explains what a CIS invoice template must include, how the CIS deduction 20% works, how the domestic reverse charge changes the layout, and gives worked examples you can copy into our UK invoice generator.

Important: This is general information as of 2026, not tax advice. CIS and the VAT reverse charge have detailed rules and exceptions. Check HMRC guidance or a qualified adviser for your situation.

How CIS works in 60 seconds

Under the Construction Industry Scheme, contractors deduct money from payments to subcontractors and pass it to HMRC. GOV.UK describes these deductions as advance payments towards the subcontractor's tax and National Insurance. Anyone who pays subcontractors for construction work is a contractor, and so are businesses outside construction that have spent more than £3 million on construction in the 12 months since their first payment.

Covered work includes most building, alteration, repair, demolition and site preparation, and installing heating, lighting, power, water and ventilation systems. GOV.UK lists exceptions such as architecture and surveying, scaffolding hire without labour, carpet fitting, making materials and delivering materials. Our wider construction invoice guide covers non-CIS jobs too.

CIS deduction rates in 2026

Subcontractor status	Deduction on labour	How you get it
Registered and verified (net payment status)	20%	Register for CIS with your UTR
Not registered, or contractor cannot verify you	30%	Default if HMRC cannot match you
Gross payment status	0%	Apply to HMRC and pass business, turnover and compliance tests

For gross payment status, GOV.UK says HMRC looks at turnover over the last 12 months excluding VAT and materials: at least £30,000 for a sole trader, or £30,000 per partner or director (or £100,000 for the whole business) for partnerships and companies. You also need a record of paying tax on time and must run the business through a bank account. From 6 April 2026, HMRC can remove gross payment status immediately where a business knew or should have known a payment was connected to fraud.

What the CIS deduction is (and is not) taken from

This is the single most important thing your template must get right. GOV.UK says contractors do not deduct from:

• VAT
• Materials you paid for directly
• Consumable stores (such as equipment used up on the job)
• Plant hired for the job
• Manufacturing or prefabricating materials

Everything else, essentially your labour and profit, is subject to the deduction. If your invoice shows one lump sum, the contractor may deduct from all of it, or estimate materials. Show them separately and keep receipts: the contractor may ask for them. The official page on getting paid as a CIS subcontractor lists the exclusions.

What to include on a CIS invoice template

A compliant CIS invoice builds on a normal UK invoice. Include:

1. Your details: name or trading name, address, contact details and, if registered, your VAT number.
2. Your UTR (and company registration number if a limited company), so the contractor can match the payment to your verification.
3. Contractor's details: name and address.
4. Unique invoice number and date. Use a consistent series; the invoice number generator helps.
5. Site address and job reference, plus the period or stage the invoice covers.
6. Labour, as a separate line or lines.
7. Materials, as separate lines, at cost you paid.
8. Subtotal (net).
9. VAT: either VAT charged, or reverse charge wording with the amount the contractor accounts for.
10. CIS deduction: rate times labour, shown as a minus line.
11. Amount payable after the deduction.
12. Payment terms and bank details.

Contractors also have to give you a monthly payment and deduction statement within 14 days of the end of each tax month. Keep them, because they prove what was deducted when you file.

The VAT domestic reverse charge on CIS invoices

Since 1 March 2021, most building and construction services between VAT-registered businesses that are reported under CIS fall under the VAT domestic reverse charge. Instead of the subcontractor charging VAT, the contractor (the customer) accounts for it on their own VAT return. HMRC's guide to the VAT domestic reverse charge for building and construction services sets out the scope.

When the reverse charge applies

• You and your customer are both VAT registered in the UK.
• The service is reported within CIS.
• The supply is at the standard or reduced rate (not zero rated).
• The customer is not an end user or intermediary supplier (they should tell you in writing if they are).

Reverse charge wording

The invoice must say "reverse charge" and make clear the customer accounts for the VAT. HMRC gives examples such as "Reverse charge: Customer to pay the VAT to HMRC" or "Reverse charge: VAT Act 1994 Section 55A applies". Show the VAT rate and the amount the customer must account for, but do not add it to the invoice total or to the total VAT charged. Our VAT invoice guide covers the other VAT invoice fields.

Worked examples: one job, three invoices

Dan is a plastering subcontractor. For one month's work he invoices labour of £2,000 and materials he bought of £500. Standard rate VAT is 20%.

Example 1: Dan is not VAT registered, CIS registered

Line	Amount
Labour	£2,000.00
Materials	£500.00
Invoice total	£2,500.00
Less CIS deduction (20% of £2,000)	-£400.00
Amount payable	£2,100.00

If Dan were not registered for CIS, the deduction would be 30% of £2,000 = £600, and he would receive £1,900.

Example 2: Dan is VAT registered and the reverse charge applies

Line	Amount
Labour	£2,000.00
Materials	£500.00
Net total	£2,500.00
VAT 20% (£500.00) to be accounted for by customer: Reverse charge: Customer to pay the VAT to HMRC	£0.00 charged
Invoice total	£2,500.00
Less CIS deduction (20% of £2,000)	-£400.00
Amount payable	£2,100.00

The contractor declares £500 output VAT and, if entitled, reclaims the same £500 as input VAT on its return. Dan does not include the £500 as output tax on his own return.

Example 3: Dan is VAT registered but the customer is an end user

Line	Amount
Labour	£2,000.00
Materials	£500.00
Net total	£2,500.00
VAT at 20%	£500.00
Invoice total	£3,000.00
Less CIS deduction (20% of £2,000, VAT excluded)	-£400.00
Amount payable	£2,600.00

Notice the CIS deduction is £400 in every case where Dan is registered. VAT never changes it, because it is worked out on labour only. Need to check VAT figures quickly? Our post on how to calculate VAT shows the formulas.

How to create a CIS invoice step by step

1. Open the free invoice generator and choose a clear layout such as the corporate invoice template.
2. Add your business details, UTR and VAT number (if registered).
3. Add the contractor's details, site address and job reference.
4. Enter labour and materials on separate lines.
5. Set VAT: either the standard rate, or 0% charged with reverse charge wording in the notes plus the VAT amount the customer accounts for.
6. Add a CIS deduction line as a negative amount (20% or 30% of labour, or none with gross payment status).
7. Check that the amount payable equals the total minus the deduction, then send as a PDF.

Trade-specific layouts are available too: see our electrician invoice template, plumbing invoice template and roofing invoice template guides.

Is gross payment status worth applying for?

With gross payment status, contractors pay you in full and you settle your tax through Self Assessment like any other sole trader. The tax itself does not change, but your cash flow does. Take Dan from the examples above. If he earns £2,000 of labour a month for 12 months, a 20% deduction withholds £400 a month, or £4,800 over the year. If his actual Income Tax and Class 4 bill on that work is lower, because of expenses such as his van and tools, the excess sits with HMRC until he files and claims it back.

To qualify as a sole trader, GOV.UK says your construction turnover over the previous 12 months, excluding VAT and materials, must be at least £30,000, and you must have paid tax on time and run the business through a bank account. At £2,000 a month, Dan's labour turnover is £24,000 a year, so he would not yet pass the £30,000 test. Once he does, gross payment status means he must budget for his own tax, including payments on account, because nothing is held back for him.

Self-billing by contractors

Some contractors use self-billing, where they raise the invoice on your behalf. If the reverse charge applies, HMRC's suggested self-billing wording states that the contractor will account for and pay the output tax, with the amount, to HMRC. Check self-billed documents carefully against your own records of labour and materials before you accept them.

Common CIS invoice mistakes

• One lump sum. Without a materials line, the contractor may deduct 20% from everything.
• Deducting CIS from VAT. VAT is always excluded.
• Charging VAT when the reverse charge applies. The contractor should not pay it, and you would have to correct the invoice.
• Applying the reverse charge to end users. If the customer has told you in writing they are an end user, charge VAT normally.
• Marking up materials and calling it all materials. Any profit element on materials is generally treated as part of the deductible amount; keep receipts for cost.
• Losing payment and deduction statements, which you need to claim the deductions back.

Claiming your CIS deductions back

As a sole trader, add up the deductions on your monthly statements and enter the total on your Self Assessment return. It is set against your Income Tax and Class 4 National Insurance, and any excess is repaid. Many subcontractors are due refunds, especially those with high allowable expenses such as vans and tools. Our Self Assessment tax return guide explains filing. Limited companies instead offset deductions through their monthly payroll submissions.

If you have not yet registered as self-employed, do that first: see how to register as self-employed in the UK, then register for CIS with your UTR.

Create your CIS invoice

A good CIS invoice template does three things: separates labour from materials, shows the CIS deduction at the right rate, and handles VAT correctly, with reverse charge wording where both parties are VAT registered. Set it up once and every monthly invoice becomes a two-minute job. Build yours now with our free invoice generator, then save it for the next valuation. No sign-up is needed, and your PDF invoice is ready to send in a few minutes.