Subcontractor Invoice Template: UK CIS Guide

If you're a subcontractor invoicing a CIS-registered contractor, a generic invoice template will cost you money. The contractor needs specific lines to process your payment correctly — and if those lines aren't there, you can lose the difference between a 20% deduction on labour and a 30% deduction on the whole lot.

Here's what a subcontractor invoice actually needs in the UK, why each line matters, and how to get it right every time.

Why a Subcontractor Invoice Is Different

A standard invoice has a description, an amount, VAT, and a total. A subcontractor invoice working under the Construction Industry Scheme adds three things a normal template doesn't have:

1. A clear labour/materials split. CIS deductions apply to labour only. If the contractor can't see which part of your invoice is labour, they may deduct CIS from the entire amount — including your materials.
2. A CIS deduction line. The contractor withholds 20% (if you're registered) or 30% (if you're not) from the labour portion and pays it to HMRC against your tax bill.
3. Your UTR. Without your Unique Taxpayer Reference, the contractor can't verify your registration status and must apply the 30% unregistered rate by default.

Get the structure right and the contractor processes your payment cleanly. Get it wrong and you're either chasing corrections or carrying an over-deduction until your tax return.

What to Include on a Subcontractor Invoice

Your details:

• Business name (and trading name if different)
• Business address
• UTR (Unique Taxpayer Reference)
• VAT registration number, if VAT-registered
• Contact details

Contractor details:

• Contractor's business name
• Site address where the work was done

Invoice details:

• A unique, sequential invoice number
• Invoice date
• Payment terms

The line items — the part that matters:

Line	Description	Amount

| 1 | Labour — [work done], [days/hours] at [rate] | £X,XXX |

| 2 | Materials — [itemised or summarised] | £XXX |

| 3 | Plant / equipment hire (if any) | £XXX |

| 4 | Subtotal | £X,XXX |

| 5 | CIS deduction at 20% or 30% on labour (line 1 only) | −£XXX |

| 6 | VAT — standard rate, or reverse charge (see below) | £XXX / £0 |

| 7 | Total due | £X,XXX |

The contractor pays you line 7. The CIS deduction in line 5 goes to HMRC and becomes a credit against your Self Assessment or Corporation Tax.

Build one with the CIS Deduction Calculator — enter your gross payment, materials, and CIS rate to see the exact deduction and net payment before you send the invoice.

CIS Deduction Rates

Your rate depends on your registration status with HMRC:

Status	Rate on labour	Who it applies to
Registered	20%	Subcontractors registered with HMRC for CIS
Unregistered	30%	Not registered — costs you 10% more on every invoice
Gross payment status	0%	Established subcontractors who pass HMRC's turnover and compliance tests

If you're being deducted at 30%, registering for CIS drops you to 20% — a meaningful cash-flow improvement on every job.

The VAT Reverse Charge

If you're VAT-registered and the work is reported under CIS, the domestic reverse charge usually applies. Under it:

• You do not add VAT to your invoice
• The contractor accounts for the VAT on their own return
• Your invoice must state that the customer is responsible for accounting for the VAT

The reverse charge applies when both you and the contractor are VAT-registered, the work is standard- or reduced-rated construction, and the contractor is not an end user. If the contractor is an end user (for example, you're invoicing the property owner directly), they'll notify you in writing and you charge VAT as normal.

This is easy to get wrong in both directions — charging VAT when reverse charge applies, or not charging when it doesn't. The reverse charge applies when both parties are VAT-registered, the work is standard- or reduced-rated construction reported under CIS, and the contractor is not an end user.

Worked Example

A self-employed bricklayer invoices a main contractor for a week's work:

Item	Amount
Labour — 5 days at £200/day	£1,000
Materials — sand, cement, ties	£150
Subtotal	£1,150
CIS deduction at 20% on labour (£1,000)	−£200
VAT (reverse charge — not invoiced)	£0
Net payment due	£950

The contractor pays £950 and sends £200 to HMRC. The bricklayer reclaims the £200 through their tax return.

Common Mistakes

Lumping labour and materials together. The most expensive error. If labour isn't identifiable, you risk a deduction on the full amount.

Leaving off your UTR. No UTR means the 30% rate, even if you're registered.

Wrong VAT treatment. Charging VAT under reverse-charge conditions, or omitting it when the contractor is an end user, creates mismatches on both VAT returns.

No reverse-charge wording. When reverse charge applies, the invoice must say so explicitly, or the contractor's accounting won't line up.

For more on building professional quotes that lead cleanly into these invoices, see how to write a job quotation. And if you quote and invoice from your phone on site, our guide to the trade invoicing app covers the mobile-first workflow.

This is general guidance on subcontractor invoicing under CIS, not tax advice. CIS and VAT have specific compliance rules — consult a qualified accountant for your circumstances.

Sources

• What you must do as a CIS subcontractor — GOV.UK
• How to register as a CIS subcontractor — GOV.UK
• VAT domestic reverse charge for building and construction services — GOV.UK