Free CIS Invoice Template UK
This free CIS invoice template is for UK construction subcontractors. A CIS invoice is a subcontractor's invoice that separates labour from materials so the contractor can deduct CIS from the labour only. Show the standard invoice fields plus your Unique Taxpayer Reference (UTR), a labour and materials split, the CIS deduction (20% if you are registered, 30% if not) and the net payable. VAT, materials, plant hire and consumables are not subject to CIS. Where both parties are VAT registered the VAT domestic reverse charge usually applies, so you do not charge VAT. Copy the free template below; no email required.
CIS rates and deduction rules checked against gov.uk (Construction Industry Scheme).
A CIS invoice is a construction subcontractor's invoice under the Construction Industry Scheme that itemises labour and materials separately so the contractor can deduct CIS from the labour element only. The contractor deducts 20% from a registered subcontractor and 30% from an unregistered one, as an advance on the subcontractor's tax and National Insurance (gov.uk). VAT, materials, consumable stores, fuel except for travelling, and plant hire are excluded from the deduction. Between VAT-registered CIS businesses the VAT domestic reverse charge (from 1 March 2021) usually applies, so the subcontractor does not charge VAT and the contractor accounts for it. The invoice should show the subcontractor's UTR, the labour and materials split, the CIS rate and amount, and the net payable. More detail and scope
This page covers:
UK CIS invoice template for construction subcontractors: how to show the CIS deduction on labour only, the 20% and 30% rates, excluded items, the VAT domestic reverse charge, required invoice fields, and how CIS deductions affect invoice finance.
Not covered here:
the standard invoice template (see /tools/invoice-template/), receipts (see /tools/receipt-template/), gov.uk for CIS registration and returns, and the unpaid invoices hub (see /unpaid-invoices/)
The template
Copy it straight into a document, email or accounting system. Square brackets mark the fields to replace. Keep labour and materials on separate lines: it is the split that decides how much CIS is deducted.
CIS INVOICE Invoice number: INV-0001 Invoice date: [date] Supply date: [date work carried out] From (subcontractor): [Your name / trading name] [Address] [Email] [Phone] UTR: [10-digit Unique Taxpayer Reference] [VAT registration number, if VAT registered] To (contractor): [Contractor name] [Contractor address] -------------------------------------------------------------- Description Amount -------------------------------------------------------------- Labour: [description of work] GBP [0.00] Materials: [description] GBP [0.00] Plant hire / consumables (not CIS) GBP [0.00] -------------------------------------------------------------- Subtotal GBP [0.00] VAT [20]% (or reverse charge, see note) GBP [0.00] -------------------------------------------------------------- Gross total GBP [0.00] CIS deduction: Labour element subject to CIS GBP [0.00] CIS deducted at [20]% (registered) -GBP [0.00] -------------------------------------------------------------- NET PAYMENT DUE (gross less CIS) GBP [0.00] -------------------------------------------------------------- CIS note: the CIS deduction is taken from the labour element only. VAT, materials, plant hire, fuel (except for travelling) and consumable stores are not subject to CIS. The contractor pays the deduction to HMRC as an advance on the subcontractor's tax and National Insurance. The rate is 20% for a registered subcontractor and 30% for an unregistered one. VAT note: most construction services reported under CIS between VAT-registered businesses fall under the VAT domestic reverse charge (in force from 1 March 2021), so the subcontractor does not charge VAT and the contractor accounts for it. Where the reverse charge applies, do not add VAT to the total. State the VAT amount the contractor must account for (or the rate, if your software cannot show the amount) and add "Reverse charge: customer to pay the VAT to HMRC". Pay to: [Bank name] Sort code: [00-00-00] Account: [00000000] Reference: INV-0001
Waiting on a main contractor to pay? Invoice finance may let you draw cash against a CIS invoice before they pay. Get free quotes.
How the CIS deduction works
Under the Construction Industry Scheme, a contractor must deduct money from a subcontractor's payments and pass it to HMRC. The rate is 20% for a registered subcontractor and 30% for an unregistered one, and the deductions count as advance payments towards your tax and National Insurance bill. Subcontractors with gross payment status are paid in full, with nothing deducted, and pay all their tax and National Insurance at the end of the tax year.
Crucially, CIS comes off the labour element only. Before applying the rate the contractor takes away what you paid for VAT, materials, consumable stores, fuel used (except for travelling), plant you hired for the job, and manufacturing or prefabricating materials (gov.uk). That is why the template splits labour and materials: a single lumped figure risks CIS being over-deducted on materials that should have been excluded.
VAT: the domestic reverse charge
HMRC says "The VAT domestic reverse charge must be used for most supplies of building and construction services" (GOV.UK). It applies to invoices with a tax point on or after 1 March 2021. Where it applies, you do not charge your customer VAT. Your customer, the contractor, pays the VAT to HMRC instead. Our reverse charge VAT guide explains who it covers and when it does not apply.
GOV.UK says you must use it if you are VAT registered in the UK, supply building and construction services, and all of these are true (GOV.UK):
- your customer is registered for VAT in the UK
- payment for the work is reported under the Construction Industry Scheme
- the services are standard or reduced rated
- you are not an employment business supplying staff or workers
- your customer has not told you in writing that they are an end user or intermediary supplier
What your invoice must say
| Situation | Invoice wording | Who pays the VAT to HMRC |
|---|---|---|
| Reverse charge applies | All the usual VAT invoice details, plus a note that the reverse charge applies, such as "Reverse charge: VAT Act 1994 Section 55A applies" or "Reverse charge: Customer to pay the VAT to HMRC". Show the VAT amount, but do not add it to the amount you charge | Your customer (the contractor) |
| Reverse charge applies, but your software cannot show the VAT amount | Add "customer to account to HMRC" for the reverse charge, show the VAT rate, and make sure the customer can see which items it covers | Your customer |
| Your customer has told you in writing they are an end user or intermediary supplier | A normal VAT invoice, with VAT charged at the right rate | You |
| Your customer is not VAT registered (for example a householder), or the work is not reported under CIS | Normal VAT rules | You |
HMRC says invoices for services under the reverse charge "must include the reference 'reverse charge'". Wording and rules from the VAT domestic reverse charge technical guide, read 21 October 2026.
Worked example: a £10,000 job
A registered subcontractor does £10,000 of standard-rated work for a VAT-registered contractor: £6,000 labour and £4,000 materials. VAT at 20% would be £2,000. CIS at 20% comes off the labour only: £1,200.
| Normal VAT | Reverse charge | |
|---|---|---|
| Work invoiced (before VAT) | £10,000 | £10,000 |
| VAT added to the amount charged | £2,000 | £0 (£2,000 shown on the invoice as reverse charge VAT) |
| CIS deducted (20% of £6,000 labour) | -£1,200 | -£1,200 |
| The contractor pays the subcontractor | £10,800 | £8,800 |
| VAT on this job paid to HMRC by | The subcontractor (£2,000) | The contractor (£2,000) |
Under the reverse charge the contractor adds the £2,000 to the output tax on its VAT Return and can reclaim it as input tax under the normal rules. The subcontractor enters only the £10,000 net sale and no output tax (technical guide).
What it does to your cash flow
In the example the subcontractor receives £8,800 instead of £10,800. HMRC's guide says: "If you are a sub-contractor, your customers will not be paying you VAT, which will reduce the gross value of payments coming into your business." You still pay VAT on your own materials and costs, so you may end up claiming VAT back from HMRC, and HMRC says you can apply to move to monthly VAT Returns. If you use invoice finance, the lender can only advance against what the contractor will actually pay you, so a reverse charge invoice is funded on the net figure with no VAT in it.
Common mistakes
- Charging VAT on work that falls under the reverse charge.
- Leaving the words "reverse charge" off the invoice.
- Using the reverse charge for a customer who has told you in writing they are an end user, or for a householder.
- Splitting one supply and fix order into separate invoices: HMRC says the reverse charge still applies to the full value of the order.
- Using the VAT Cash Accounting Scheme for reverse charge work, which HMRC says you cannot do.
Sources: GOV.UK, Check when you must use the VAT domestic reverse charge, How to use it if you supply building and construction services and the VAT domestic reverse charge technical guide, all read 21 October 2026. If you are not sure whether a contract falls under the reverse charge, check with HMRC or your accountant before you invoice.
“The single biggest mistake I see on CIS invoices is not itemising materials. If you invoice one gross figure for a job that was half materials, a cautious contractor can apply CIS to the whole thing, and you have just handed HMRC 20% of money that was never taxable income. Break out labour, materials and plant on every invoice, keep the supplier receipts for the materials, and show the CIS deduction as its own line so the net payment is unambiguous. It is your cash flow, not just neat paperwork.”
CIS invoices and invoice finance
Construction is one of the sectors invoice finance was built for, because payment terms are long and cash is tied up in work already done. But providers underwrite construction carefully: the CIS deduction and any contractual retention reduce the net cash actually collected, and contra-charges, applications for payment and stage billing add risk. The advance is set against the net fundable value, not the headline gross.
A CIS invoice that clearly separates labour, materials and the deduction, and states the correct VAT treatment, is easier to fund than one that hides the real net figure. If you are weighing finance against waiting on a slow-paying main contractor, our costs guide sets out the numbers, and the unpaid invoices hub covers chasing overdue payments.
Companion templates
- Standard invoice template: for non-CIS work and the general required fields.
- Receipt template: to confirm a payment received against a CIS invoice.
- Statement of account template: to summarise a contractor's account over a period.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam was managing director of Penny, a UK invoice finance business, from July 2020 to November 2023. His career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library. Career record.
Last updated: