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.

CIS Beta is still in development as we make additions and improvements.

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.

Edit an existing draft or awaiting payment invoice to add CIS information

When you edit an existing draft or awaiting payment 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

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.