Solution Properties
Solution ID:
222001000101300
Last Modified Date:
Wed Aug 12 10:39:19 UTC 2026
Taxonomy Path:
Case category//How do I...//governmental/legislative compliance
Author:
[email protected]
Set up CIS for your business
Description
Turn on the CIS features in Accounting to:
  • Record your CIS registration details
  • Add CIS ledger accounts to your chart of accounts
  • Add CIS options to contact records to allow you to set up contacts as contractors or subcontractors
  • Produce CIS transactions and reports

TIP:

TIP: Once you activate CIS, the options stay available on your contacts and chart of accounts.

Cause
Resolution

Activate CIS 

Make sure you have permission to update your financial settings and activate CIS. You’ll need to be a user with the role Administrator.

  1. Select Settings, then Business Settings.
  2. Under Financial Settings, select Construction Industry Scheme (CIS).
  3. Select I'm CIS Registered.
  4. Select whether you're a Contractor, Subcontractor, or both.
  5. Enter the required references marked with an asterisk*. 
    ▼ Reference formats
    Unique Taxpayer Reference (UTR) 10 numbers.
    Employer's PAYE Reference Three numbers, a slash, then one to ten letters or numbers (123/A45678 or 123/AB45678).
    Accounts office Reference Three numbers, two letters, then eight letters or numbers (123PA12345678).
  6. If you're a subcontractor, select your Deduction Rate between:
    • Gross 0.00%
    • Standard 20.00%
    • Higher 30.00%
  7. Select Save.

CIS ledger accounts

When you activate CIS, we add all the CIS ledger accounts you need to your chart of accounts automatically.

We use the next available nominal code on the range for each section. For example, in the sales category, if 4910 is the last code used, we use 4911 for Labour and 4912 for Materials.

If you want more detailed reporting, you can set up your own CIS ledger accounts instead. This lets you report separately on different types of labour or materials.

▼ CIS ledger accounts for subcontractors
Code Ledger Name Category Category Group VAT Rate Used on Description
4911 CIS Labour Sales Income Standard 20% Sales, Journals, Reports Records income received from CIS labour on sales invoices.
4912 CIS Materials Sales Income Standard 20% Sales, Journals, Reports Records income received from CIS materials on sales invoices.
  The CIS Tax Asset ledger accounts        

Used to record the expected CIS amount deducted reduce the amount owed on the invoice.
1131 CIS Tax Asset Withheld Current Assets Asset No VAT Journals, Reports

This function records the CIS amount deducted from a sales invoice, representing the anticipated withholding amount, providing a comprehensive view of your CIS deductions
1132 CIS Tax Asset Realised Current Assets Asset No VAT Journals, Reports


When you pay the invoice, Sage Accounting moves the CIS amount from the Withheld account to the Realised account. This shows the total CIS actually withheld.
▼ CIS ledger accounts for contractors
Code Ledger Name Category Category Group VAT Rate Visibility Description
5111 CIS Labour Expense Direct Expenses Expenditure Standard 20% Purchases, Journals, Reports Records CIS labour charged on subcontractor invoices.
5112 CIS Materials Purchased Direct Expenses Expenditure Standard 20% Purchases, Journals, Reports Records CIS materials charged on subcontractor invoices.
  The CIS Tax Liability ledger accounts        

Used to record the amount of CIS amount withheld, letting you see your total liability at a glance.
2501 CIS Tax Liability Current Liability Liability No VAT Journals, Reports

This records the CIS you deduct before you pay the invoice. It shows what you expect to withhold from the subcontractor.
2502 CIS Tax Liability Realised Current Liability Liability No VAT Other Payments, Journals, Reports

When you pay the invoice, Sage Accounting transfers the CIS amount from the CIS Tax Liability account to the CIS Tax Liability Realised account. This shows your actual liability.

 

Steps to duplicate
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