Set up CIS deductions for subcontractor bills
Verify subcontractors with HMRC, apply Construction Industry Scheme deductions on bills, and prepare the monthly CIS300 return from the YionStack accounting module.
In this guide
Compliance- Steps
- 5
- Prereqs
- 3
- Pitfalls
- 3 common ones
- Related
- 3 guides
Walkthrough only — no setup wizard. The flow is exactly what you do inside YionStack today.
Before you start
- Active HMRC CIS contractor registration (UTR + accounts office reference).
- HMRC online services credentials entered in Settings → Integrations → HMRC.
- Subcontractors set up as suppliers in the contacts table with their UTR and NI number / company UTR captured.
Steps
- 1
Enable CIS on the business
Go to Settings → Accounting → CIS. Enable the scheme, enter your contractor UTR and accounts office reference, and choose whether to default new subcontractors to "verify on first bill" or "verify immediately".
- 2
Verify a subcontractor
Open a supplier marked as a subcontractor and choose Verify. YionStack sends a verification request to HMRC and stores the response (Gross, Standard 20%, Higher 30%, or Unmatched) against the supplier. The verification reference and date are kept on the contact for audit.
- 3
Enter a CIS bill
When recording a bill from a verified subcontractor, choose the CIS line type for any labour portion. YionStack applies the correct deduction rate from the supplier’s verification status and shows the gross, deduction and net to pay on the bill.
- 4
Pay the subcontractor
Pay the net amount (gross minus deduction). The deduction sits on the CIS liability account until the monthly CIS300 is filed; YionStack tracks the cumulative deduction per subcontractor across the tax month.
- 5
File the CIS300 monthly return
On the 6th of each month, the CIS300 workspace opens with the previous tax month’s data assembled (subcontractor names, UTRs, gross and deduction totals). Review, approve and submit through the HMRC CIS API. Subcontractors receive their deduction statement automatically.
Common pitfalls
Materials and labour on one bill
CIS deducts on the labour portion only, not materials. When entering a bill, split labour and materials onto separate lines and tag only the labour as CIS. YionStack’s line type makes this explicit.
Reverse charge VAT
CIS subcontractor bills are usually subject to the construction reverse charge for VAT. The reverse charge sits on the bill alongside CIS; both apply at the same time. YionStack applies both correctly when CIS is enabled on the labour line.
Missing the 19th deadline
CIS300 returns are due by the 19th of each month for the previous tax month. Late returns trigger an automatic £100 penalty. YionStack flags the unfiled return on the 14th so there is time to review.
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