UK CIS Subcontractor Invoice Template: 20% Deduction & Reverse Charge VAT (2026–2027)

Short answer: A compliant UK CIS subcontractor invoice template (or free CIS invoice app) for 2026–2027 must separate labour from direct materials and plant consumables, state your Unique Taxpayer Reference (UTR) and National Insurance or company number, show the 20% registered (or 30% unregistered / 0% gross) Construction Industry Scheme deduction on labour only, and include Domestic Reverse Charge VAT wording when both parties are VAT-registered.

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If a UK bricklayer, groundworker, sparky, dryliner, carpenter, or roofing subcontractor lumps labour and materials onto a single line item, the main contractor is legally forced by HMRC’s Construction Industry Scheme (CIS) rules to deduct 20% (or 30%) CIS tax from the entire invoice total—including your materials. On a £4,000 invoice with £2,200 of timber and £1,800 of labour, failing to split the lines costs you £440 in immediate cash flow that stays locked up with HMRC until you file your annual Self Assessment return.

This guide gives you a copy-and-use 2026–2027 UK CIS subcontractor invoice template covering both non-VAT-registered sole traders and VAT-registered subcontractors operating under the 20% Domestic Reverse Charge (DRC). For deeper rules on verification and monthly PDS statements, see our UK CIS subcontractor invoice guide and UK domestic reverse charge VAT in construction.

What fields must a UK CIS subcontractor invoice template include in 2026–2027?

Before a main contractor’s accounts department processes your payment run for the CIS tax month (which runs from the 6th of one month to the 5th of the next), they check that your invoice carries every detail needed to verify you with HMRC and populate their monthly CIS300 return:

Invoice Field	Why the Main Contractor Needs It	What Happens If You Leave It Off
Your trading name, legal name & address	Matches HMRC CIS verification database	Payment held until identity matches UTR
Unique Taxpayer Reference (10-digit UTR)	Mandatory for HMRC CIS verification	Main contractor must deduct 30% emergency CIS rate instead of 20%
National Insurance Number (Sole Trader) or CRN (Ltd)	Required alongside UTR for sole trader verification	Verification fails; triggers 30% deduction
Sequential Invoice Number, Issue Date & Tax Point	Statutory bookkeeping & VAT requirement	Rejected by site quantity surveyor or accounts
Site address / Plot number & Work description	Proves the work falls within CIS construction operations	Delays sign-off by site manager
Labour line(s) separated from Material line(s)	CIS 20%/30% applies only to labour (and plant with operator)	Contractor deducts 20% from your materials too
CIS Deduction Calculation (0%, 20%, or 30%)	Shows Gross Total, Less CIS Deduction, and Net Payable	Confusion over exact BACS transfer amount
Domestic Reverse Charge VAT notice (if VAT-registered)	Required under VAT Act 1994 s 55A for CIS-reported supplies	Invoice returned for correction

How does the filled 2026–2027 UK CIS invoice template look (Non-VAT & VAT DRC examples)?

Template A: Non-VAT Registered CIS Sole Trader (20% Registered Rate)

Use this layout when your rolling 12-month turnover is below the £90,000 UK VAT registration threshold (see UK VAT registration threshold for sole traders):

Line Item Description	Category	Qty / Days	Rate (£)	Line Total (£)	CIS Deductible?
1st Fix Carpentry — Plot 14 Oakfield Site (5 days labour)	Labour	5 days	£260.00	£1,300.00	Yes (20% = £260.00)
C24 structural carcassing timber, joists, hangers & fixings (per Travis Perkins receipt attached)	Materials	1 lot	£840.00	£840.00	No (0% CIS)
Gross Invoice Subtotal	—	—	—	£2,140.00	—
Less: CIS Deduction at 20% on Labour (£1,300.00 × 20%)	—	—	—	−£260.00	Credited to your HMRC UTR
Net Amount Payable by BACS to Subcontractor	—	—	—	£1,880.00	—

Template B: VAT-Registered CIS Subcontractor (Domestic Reverse Charge 20% Applies)

When both you and the main contractor are UK VAT-registered, the contract is reported under CIS, and the main contractor is not an “End User” (such as the property owner or developer occupying the building), you do not add 20% VAT to the net total Payable. Instead, you state the reverse-charge VAT amount for the contractor to account for on their own VAT return:

• Labour (CIS subject): £2,000.00
• Materials (CIS exempt, actual cost excluding VAT): £1,000.00
• Total Net Invoice (Before VAT & CIS): £3,000.00
• VAT at 20% (£600.00) — NOT CHARGED: “Customer to account to HMRC for the reverse charge output tax on the VAT-exclusive price of items marked ‘reverse charge’ at the relevant VAT rate (VAT Act 1994 Section 55A applies).”
• Less: 20% CIS Deduction on £2,000.00 Labour: −£400.00
• Total Cash Payable by Main Contractor: £2,600.00

How do you price materials on a CIS invoice so you don’t lose CIS on your markup?

Under HMRC CIS Manual CISR15060, the material deduction exclusion applies strictly to “the direct cost of materials used or to be used in carrying out the construction operations.”

1. If you are not VAT-registered: The direct cost of materials includes the VAT you paid at the builders’ merchant (since you cannot reclaim that input VAT).
2. If you are VAT-registered: The direct cost of materials is the net (ex-VAT) price you paid at the merchant.
3. What about material markup? HMRC states that if a subcontractor marks up materials significantly above actual cost, the profit markup element is technically subject to CIS deduction if challenged. Always keep the merchant receipts attached or logged so the main contractor can verify your materials line without deducting 20% from it.

What about plant hire, scaffolding, fuel, and travel expenses on a CIS invoice?

One of the most frequent disputes between subcontractors and quantity surveyors in 2026–2027 is which non-material items go into the CIS-deductible labour bucket versus the CIS-free materials bucket:

Item Billed on Subcontractor Invoice	Treated as Labour (20% CIS Deducted) or Materials (0% CIS)?	HMRC CISR15000 Rule
Hired plant/machinery (mini-digger, cherry picker, skip) from a third-party hire company	Materials (0% CIS)	Deductible as a material cost if you hired it in from an external plant-hire company and pass on the hire charge
Plant or machinery that YOU own yourself	Labour (20% CIS deducted)	If you own the mini-digger or van yourself, HMRC does not allow a material deduction for its hire value; only consumable fuel used by the machine qualifies as materials
Travel, subsistence, accommodation & mileage recharged to contractor	Labour (20% CIS deducted)	Recharged travel, hotel, and mileage allowances on a CIS invoice are treated by HMRC as part of the gross CIS payment subject to 20% deduction
Scaffolding hire (supply only vs supply-and-erect)	0% CIS if pure equipment hire; 20% CIS on erection/dismantling labour	Split scaffolding hire fee from erection labour

When must the main contractor give you your CIS Payment and Deduction Statement (PDS)?

Under HMRC regulations for 2026/27 and 2027/28, the CIS tax month ends on the 5th of every month, and the main contractor must submit their CIS300 return and issue your written CIS Payment and Deduction Statement (PDS) by the 19th of that same month (within 14 days of the end of the tax month).

Never throw a PDS away: those monthly statements are your proof to HMRC of the 20% tax already deducted at source when you file your UK Self Assessment tax return and reduce your UK payments on account.

Frequently asked questions

What happens if I don’t separate labour and materials on my UK CIS invoice?

If you submit a single lump-sum figure combining labour and materials without itemizing the direct cost of materials, the main contractor is required by HMRC to deduct 20% (or 30% if unregistered) CIS tax from the entire invoice total—meaning you lose 20% of your material reimbursement upfront until the end of the tax year.

Do I charge CIS deduction on VAT or before VAT?

CIS deductions are always calculated on the VAT-exclusive labour total, never on the VAT element. Furthermore, when both the subcontractor and main contractor are VAT-registered and the supply is reported under CIS (with no End User exemption), the 20% Domestic Reverse Charge applies so no VAT cash changes hands at all.

Is travel or mileage recharged to a main contractor subject to 20% CIS deduction?

Yes. Under HMRC CIS rules, any travel expenses, mileage, fuel for your own van, or overnight accommodation that you recharge to the main contractor on your invoice counts as part of your gross taxable payment and must have 20% CIS deducted from it by the contractor. You still claim your actual allowable travel or 45p mileage deduction on your own Self Assessment return.

How do I qualify for 0% Gross Payment Status (GPS) under CIS in 2026–2027?

To qualify for 0% Gross Payment Status so contractors pay you 100% with zero CIS withheld, you must pass three HMRC tests: the Business Test (carrying out construction in the UK and operating via a bank account), the Turnover Test (at least £30,000 net construction turnover excluding VAT and materials for a sole trader), and the Compliance Test (filing and paying all Self Assessment, VAT, and PAYE obligations on time over the past 12 months).

What is the exact Domestic Reverse Charge wording to put on a UK CIS invoice?

HMRC accepts any clear statement on your invoice that references Section 55A of the Value Added Tax Act 1994, such as: “Domestic Reverse Charge applies — VAT Act 1994 Section 55A. Customer to pay the output VAT at 20% directly to HMRC on their VAT return.”

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This article is general tax information, not personalized tax advice. Confirm CIS and VAT rules with HM Revenue & Customs (gov.uk) or a qualified UK accountant.

Create CIS-ready invoices with automatic labour/material splits and track your monthly 20% CIS deductions on-device with Keel on the App Store.