Add or edit a CIS invoice for a contractor

Create a new invoice, or edit an existing invoice in Xero for work done that is subject to CIS.

Before you add or edit a CIS invoice in Xero

Make sure you have set your Subcontractor rate in the Financial Settings. This is so Xero knows the CIS rate to apply to the invoice.

Add a CIS invoice in Xero

Add an invoice in the normal way.

In the Account field, where the invoice line item is:

  • Labour - select CIS Labour Income. Xero calculates the CIS deduction that will be held by the contractor, using the Subcontractor Rate you set in your Financial Settings. The CIS deduction is displayed separately on the invoice.
  • Other income not subject to CIS - select another income code as appropriate.

You can't create or edit a CIS invoice on the Xero Mobile app or API, or select CIS account codes when creating repeating invoices.

Edit an existing invoice to add CIS information

When you edit an existing invoice to add the CIS Labour Income account, Xero adds the CIS deduction amount below the invoice total.

Edit a draft invoice

Edit an awaiting payment invoice

Edit a paid invoice

You can't:

  • Change between CIS and non-CIS accounts on a paid invoice.
  • Select the CIS Asset or CIS Liability account in an invoice.

When a CIS invoice is approved, Xero posts the amount of the CIS deduction to the CIS Asset account. The amount shown on the Balance Sheet reflects the total withheld by the Contractor and paid to HMRC on your behalf.