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Learn about the Construction Industry Scheme (CIS)

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Overview of the CIS scheme and how it works with Sage Accounting.


  • Set up CIS in Accounting so sales and purchase invoices calculate the CIS deduction
  • If you're a contractor, send monthly returns directly to HMRC and produce payment and deduction statements for your subcontractors (also known as CIS vouchers)
  • If you're a subcontractor, record CIS for your customers and remain compliant


What you need to know

  • The Construction Industry Scheme (CIS) is a HMRC tax requirement for contractors and subcontractors in the construction industry. See
  • If you're a contractor, you must register for the scheme
  • Under CIS, contractors deduct money from a payments received from subcontractor’s payments and pass it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance
  • If you're a subcontractor you don’t have to register, but deductions are taken from your payments at a higher rate if you're not registered
  • If you want to import your own chart of accounts, you must do this before you activate CIS. Once activated, we create additional CIS ledger accounts and disable the import chart of accounts feature
  • If you're using Sage Accounting, you can record CIS as either a subcontractor, contractor or both
  • Learn how to use the CIS feature if you currently enter CIS into the system manually

How it works in Accounting

Turn on the CIS features before you start.

Use special CIS ledger accounts when recording transactions and we deduct the CIS amount automatically.

Identify which of your contacts are contractors and subcontractors. The CIS ledger accounts are only available when entering transactions for CIS contacts.

CIS for contractors

If you are a contractor:

  1. Identify which of your suppliers are subcontractors. This is to make sure we apply the correct deductions to your transactions.
  2. Identify which subcontractors need to use reverse charge VAT.
  3. Use the link from the CIS tab within the subcontractor's supplier record to verify their status with HMRC.
  4. When recording purchase invoices, select a CIS ledger account and we'll automatically deduct the CIS withheld amount and record the withheld tax correctly when processing payments.
  5. Create and submit your CIS 300 Monthly Return to HMRC.
  6. Create individual monthly payment and deduction statements (CIS vouchers) to send to your subcontractors.

CIS for subcontractors

If you are a subcontractor:

  1. Identify which customer contacts are your contractors. This is to make sure you can select the CIS ledger accounts and we apply the correct deductions to your transactions.
  2. Identify when contractors need to use reverse charge VAT.
  3. When recording sales invoices, select a CIS ledger account and we'll automatically deduct the CIS amount withheld by your contractors.
  4. Create a CIS Suffered report, over any given period, to track the deductions made on your behalf by your contractors.

Related Solutions

Set up CIS for your business

CIS opening balances CIS was previously deducted on payment (Sage 50)

CIS opening balances when CIS was previously deducted from invoices

Transitioning from manually recording CIS tax withheld to using the CIS feature