What should a CIS subcontractor invoice include?

As of October 2026, a CIS invoice needs the usual details, labour split from materials and hired plant, because the 20% or 30% deduction is not taken from what you paid for those, plus reverse charge wording if it applies.

Under the Construction Industry Scheme (CIS), the contractor works out the deduction from your invoice. The clearer your invoice, the less the contractor has to estimate.

The lines every CIS invoice should have

GOV.UK lists the invoice basics: a unique number, your and your customer's names and addresses, a description, the supply date, the invoice date, the amounts and the total. The CIS-specific lines come from GOV.UK's subcontractor and contractor guidance and HMRC's CIS 340 guide, checked on 16 October 2026.

A worked example

You are a VAT-registered electrician doing a first fix for a VAT-registered main contractor on a commercial refit, so the domestic reverse charge applies. You bought the cable and containment yourself and hired a scissor lift from a hire firm.

The contractor starts from £4,000, takes off the £900 of materials and the £300 of hire, and deducts 20% from the £2,800 left. That is £560, so you are paid £3,440. The £800 of VAT is not on your total: the contractor accounts for it on its own VAT return.

If you are not VAT registered, there is no VAT line, and the VAT you paid on the cable and the hire goes into those lines as part of their cost.

The details that change the deduction

Materials at cost. The law leaves out the direct cost to you of materials, and HMRC's manual says that means what you can show you paid. If you charge materials at £1,000 but paid £900, the extra £100 has CIS taken from it like labour. Keep the receipts, because the contractor may ask for them and will estimate the cost if you have none.

Only what you bought. Materials the contractor supplied, or that someone else paid for, are not yours to take off.

Plant you own. Only plant hired from someone else counts. HMRC's guidance allows no notional charge for your own mixer or lift, although fuel it uses on the job can still go in as materials.

VAT invoices. If you are VAT registered and charge VAT, VAT Notice 700 adds your VAT number, the tax point, the VAT rate and the VAT amount. Under the reverse charge, HMRC's technical guide says the invoice must also carry the words reverse charge and show the VAT amount or rate without adding it to the total. Our reverse charge guide covers when it applies.

What this means for you

A clear split helps your cash flow. Every pound of materials that ends up in the labour line has 20% taken from it, and if you are a sole trader that money waits with HMRC until after the tax year. Before you join Making Tax Digital, over-deducted CIS is claimed back through your Self Assessment tax return. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return, and any refund is requested separately through HMRC online services. Either way, the sooner after 5 April the return is filed, the sooner HMRC can repay you.

Your invoices are also your income records. As a sole trader, your tax return uses the gross amount before deductions as income, with the CIS taken off shown separately, so each invoice should tie to a line on the contractor's monthly statement.

Steps to set up a CIS-ready invoice

1. Check the name and UTR on your template match your CIS registration exactly.
2. Split labour, materials, hired plant, fuel and any travel charged into separate lines.
3. Enter materials and hire at what you paid: excluding VAT if you are VAT registered, including VAT if you are not.
4. Add the right VAT treatment: 20% VAT, reverse charge wording, or none if you are not registered.
5. File the receipts for each invoice, so you can answer a contractor's question the same day.
6. When the monthly statement arrives, check the gross, materials and deduction against the invoice.

To see the deduction on your own figures, use the CIS deduction calculator. The free MTD check shows when Making Tax Digital starts for you, and the trades section has more on CIS.