CIS and VAT Invoices for Decorators: A Worked Example
Homeowners: no CIS. For contractors, CIS comes off payment: 20% if registered, 30% if not, nothing with gross status, not off VAT or materials you paid for directly. The reverse charge may apply if you are both VAT registered, the work is reported under CIS and they have not confirmed in writing they are an end user or intermediary supplier.
By BrushDesk. Last checked 25/10/2026.
This is general guidance, not tax advice. Your own position can differ, so check it with an accountant or HMRC.
Who CIS applies to
The Construction Industry Scheme (CIS) covers contractors who pay subcontractors for construction work, and the subcontractors doing that work. If you do construction work for a contractor, CIS is likely to touch your invoices. Whether a particular job counts as construction work is for you and HMRC to settle.
Work for a private householder is outside CIS. A homeowner is not counted as a contractor, so a homeowner invoice has no CIS deduction on it.
How to invoice a main contractor under CIS
The contractor takes the CIS deduction from your payment. They do not take it from the VAT on your invoice, or from the cost of materials you have paid for directly. gov.uk lists some other costs that are left out too, such as plant hire and fuel, so check the CIS 340 guide for your job. The rate depends on your status with HMRC: 20% if you are registered, 30% if you are not, and 0% with gross payment status, where no deduction is taken.
In the example below the job is £1,200.00 of labour and £300.00 of materials you paid for directly, £1,500.00 before VAT. At 20% the deduction is £240.00, which is 20% of the £1,200.00, not of the whole £1,500.00. On the same invoice it would be £360.00 at 30%, and nothing with gross payment status.
VAT on a normal invoice
If you are VAT registered, you charge VAT on your invoice. Most services are charged at the standard rate of 20%. You must register once your taxable turnover for the last 12 months goes over £90,000. Other rates are not covered here: see VAT rates on gov.uk.
VAT is worked out on the whole net amount, labour and materials together, and no CIS is taken from the VAT. In the table, VAT is £300.00, the invoice total is £1,800.00, and after the CIS deduction the contractor pays you £1,560.00.
| Labour | £1,200.00 |
|---|---|
| Materials you paid for directly | £300.00 |
| Net, before VAT | £1,500.00 |
| VAT at 20% | £300.00 |
| Invoice total | £1,800.00 |
| Less CIS at 20% (not taken off materials or VAT) | £240.00 |
| The contractor pays you | £1,560.00 |
Does the VAT reverse charge apply to decorators?
It may, when every condition is met. The domestic reverse charge for building services moves the VAT from you to your customer. gov.uk says you must use it when you and your customer are both UK VAT registered, the payment for the work is reported under CIS, you are not an employment business, and your customer has not given written confirmation that they are an end user or intermediary supplier. Other conditions are listed on the gov.uk page.
Building contractors are not usually end users, because they make onward supplies, so the reverse charge can apply when you work for one. For a private homeowner it does not apply, because the customer will not be VAT registered.
When it applies you do not add VAT to the total. The invoice has to make clear that the reverse charge applies, and show the VAT amount or rate without adding it in. In the table, the total is £1,500.00, the same as the net. The £300.00 of VAT is shown, and your customer accounts for it on their own VAT return. CIS still comes off in the same way, so you are paid £1,260.00.
BrushDesk does not check these conditions. You work out whether they are met for each customer, then mark the invoice as reverse charge. Ask the contractor, and ask your accountant or HMRC if you are unsure.
| Labour | £1,200.00 |
|---|---|
| Materials you paid for directly | £300.00 |
| Net, before VAT | £1,500.00 |
| VAT at 20%, reverse charge: shown, not added | £300.00 |
| Invoice total | £1,500.00 |
| Less CIS at 20% (not taken off materials or VAT) | £240.00 |
| The contractor pays you | £1,260.00 |
What to keep for your tax return
The contractor must give you a payment and deduction statement within 14 days of the end of each tax month. Keep every one, because HMRC might ask for evidence of your deductions.
gov.uk says to enter your total pay before deductions were taken as income on your tax return, and the total deductions contractors have taken as CIS deductions.
How BrushDesk handles each
CIS on your invoices. In Settings, Company, you switch "We do CIS work" on or off and set your CIS status. On commercial jobs for a customer you have marked as a CIS contractor, the final invoice takes its CIS rate from that status: 20%, 30% or 0%, the same rates as this page. If you have not set a status, invoices assume registered. A firm that only works for homeowners can switch CIS off and nothing is deducted.
What the customer owes is the net, plus VAT, less the CIS deduction, worked out the same way on the invoice, the customer portal and the payment link.
The reverse charge. You set the reverse charge on the customer, with the VAT Reverse Charge tick on the customer record, and quotes and invoices for that customer then carry it. BrushDesk leaves VAT out of the total and prints a reverse charge notice on the invoice PDF, the invoice page, the customer portal and the invoice email, saying the customer accounts for the VAT. Check the notice shows the VAT amount or rate your customer needs. BrushDesk does not check whether the reverse charge applies to that customer. You work that out.
CIS you have suffered. The CIS suffered report lists the deductions your customers took from your invoices once they are paid, by CIS tax month, so you can check them against their statements.
CIS you deduct. If you pay your own subcontractors, deductions on those payments use the same rates, set per subcontractor.
Where these rules come from
Every rule here is from gov.uk, with the date it was read.
- CIS covers contractors who pay subcontractors for construction work, and the subcontractors doing it.Read 25/10/2026
- Private householders are not counted as contractors, so work for them is outside CIS.Read 25/10/2026
- A registered subcontractor has a CIS deduction of 20% taken from payments.Read 25/10/2026
- A subcontractor not registered for CIS has a CIS deduction of 30% taken from payments.Read 25/10/2026
- With gross payment status the contractor takes no CIS deduction (0%).Read 25/10/2026
- The contractor takes no CIS deduction from VAT on your invoice, or from the cost of materials you have paid for directly.Read 25/10/2026
- Some other costs are also left out before the deduction is worked out, such as plant hire and fuel. CIS 340 has the full list.Read 25/10/2026
- The standard rate of VAT is 20%, for most goods and services.Read 25/10/2026
- You must register for VAT when your taxable turnover for the last 12 months goes over £90,000.Read 25/10/2026
- You must use the domestic reverse charge when you and your customer are both UK VAT registered, the payment for the work is reported under CIS, you are not an employment business, and your customer has not given written confirmation that they are an end user or intermediary supplier. Other conditions are on the page.Read 25/10/2026
- Building contractors are not usually end users because they make onward supplies. For a private homeowner the reverse charge does not apply, because the customer will not be VAT registered.Read 25/10/2026
- An invoice under the reverse charge must make clear that it applies, and show the VAT due, or the rate if the amount cannot be shown, without adding it to the total.Read 25/10/2026
- Keep your payment and deduction statements. The contractor gives you one within 14 days of the end of each tax month.Read 25/10/2026
- On your tax return, enter your total pay before deductions were taken as income, and the total deductions contractors have taken as CIS deductions.Read 25/10/2026
This is general guidance, not tax advice. Your own position can differ, so check it with an accountant or HMRC.
Questions decorators ask
- Does a homeowner invoice have CIS on it?
- No. Private householders are not counted as contractors, so work for them is outside CIS and nothing is deducted.
- Is CIS taken off materials or VAT?
- Not off VAT, and not off the cost of materials you have paid for directly. gov.uk also leaves out some other costs, such as plant hire and fuel. CIS 340 has the full list.
- What CIS rate is taken if I am not registered?
- 30%, against 20% for a registered subcontractor. With gross payment status the contractor takes no deduction.
- Do I charge VAT to a contractor under CIS?
- Usually yes. The domestic reverse charge may apply instead. gov.uk sets conditions, including that you and the contractor are both UK VAT registered, the payment for the work is reported under CIS, and the contractor has not given written confirmation that they are an end user or intermediary supplier. When it applies you show the VAT but do not add it, and they account for it on their own VAT return. Check the full list on gov.uk.
- Who decides whether the reverse charge applies?
- You work it out for each customer. BrushDesk lets you mark an invoice as reverse charge but does not check the conditions. Ask your customer, and your accountant or HMRC if you are unsure.
- What should I keep for my tax return?
- Every payment and deduction statement your contractors give you. HMRC might ask for evidence of your deductions.