How CIS deductions work on an invoice

CIS withholds tax from what a customer pays you, on its way to HMRC. It reduces the amount collected on this invoice, never the revenue you've actually earned.

Before you start

The CIS deduction only appears on an invoice if your company is set up as a CIS subcontractor, with a withholding rate, in your company settings. See adding your VAT and CIS settings.

Turn on the CIS deduction

1. Open the invoice. It must still be a draft, since the toggle is locked once an invoice is issued.
2. In the totals footer, switch on CIS deduction.
3. Trame calculates the deduction from your company's registered CIS rate, Registered (20%), Not registered (30%), or Gross payment status (0%), and shows it as CIS deduction (20%) with the amount subtracted.
4. The bottom line changes from Total inc VAT to Amount due, the figure your customer will actually be asked to pay.

Keeping materials out of it

Only labour sits inside the scheme. Materials are outside it, so they should not be withheld against.

Each section of the invoice carries its own toggle for this, reading CIS or No CIS. Set your materials section to No CIS and it drops out of the figure the deduction is worked out on. Labour sections stay on CIS.

CIS is never withheld on VAT, only on the net amount.

What it does to the numbers

CIS reduces the Amount due at the foot of this invoice, not the total you've recorded as earned. Your invoices list, and any revenue totals, still count the full invoice amount, the deduction is withheld on your behalf, not lost.

Frequently asked

Can I change the CIS rate for one invoice?

No. The rate, Registered, Not registered, or Gross payment status, follows your company's CIS settings. The invoice only has the on/off switch.

Do I still need to report CIS deductions to HMRC myself?

Yes. Trame calculates and shows the deduction on the invoice, but reporting and reconciling CIS with HMRC is still down to you.

Why doesn't the deposit invoice show a CIS deduction?

CIS applies on the final invoice, where the balance is actually collected, not on the deposit. See deposit invoices and how the balance works.