Learn how to apply Construction Industry Scheme (CIS) deductions to sales invoices for your CIS contractors. You can also apply reverse charge VAT to sales invoices for your CIS contractors.

• Set up CIS for your business to make sure you have the correct CIS ledger accounts to your chart of accounts
• Set up your CIS contacts as contractors
• We only calculate CIS deductions on invoices where you use a CIS Labour ledger account
• We apply the CIS deduction to the net amount of the CIS labour, exclusive of VAT

Create a CIS sales invoice

1. Select Sales and then Sales Invoices.
2. Select New Invoice.
3. Choose a contact that you've set up for CIS.
   
   TIP:

   A blue banner shows on your invoice, once you've set your contact up for CIS and CIS deductions.

    

4. If applicable, select Use Reverse Charge VAT.

   When to use reverse charge VAT ▼

   Reverse charge VAT should get applied to invoices where you're supplying services under the CIS scheme. Find out more about VAT domestic reverse charge for building and construction services.

   Remember that the reverse charge applies to theses services plus any construction materials used directly for those services.

5. Enter your labour charge on a separate line.
   • Make sure you select the CIS labour ledger account to ensure you record CIS correctly
   • We only take CIS deductions from lines recorded against a CIS Labour ledger account
   • If you’ve set a default on your contact, we select it automatically
   • To apply a discount, use a separate line and record the figure as a negative value

6. Enter any CIS Materials on a separate line. Choose a CIS Materials ledger account.

7. Your invoice will show the total charges for the labour and materials, CIS deductions and where applicable, the VAT being the amount you're reversing.

8. Once you're happy with your invoice, select Save.

CIS quotes and estimates

• We can apply Reverse charge VAT to the quote or estimate
• We only apply CIS deductions when you convert the quote or estimate to an invoice