Invoice a contractor under CIS
Updated 2026-10-04
Once you've told BusyBee Hub your CIS status, invoicing a contractor works the same way as any other invoice; the deduction is worked out for you.
Mark the contractor
Open the contractor's contact (or create a new one) and tick This customer is a CIS contractor. Add their Employer reference. It's printed on their payment and deduction statements, in the form `123/AB56797`.
Mark the labour on your invoice
Start a new invoice for the contractor. With CIS on, you'll see Apply CIS deduction ticked automatically for a contractor you've marked. Untick it if this particular invoice isn't covered by CIS.
Each line has a Labour checkbox. Tick it for work you did; leave it off for materials, plant hire or anything else that isn't subject to the deduction; CIS is only ever deducted from labour.
The totals show:
- Labour and Materials (added up from your ticked and unticked lines)
- Subtotal and VAT (if you're VAT registered)
- CIS deduction (20% or 30% of your labour, at the rate your CIS status sets)
- Amount payable (what the contractor actually pays you)
What the contractor sees
The invoice, its PDF and the link the contractor opens all show the same breakdown, ending with the amount payable, so there's no argument about what to pay.
Recording the payment
When the contractor pays you the net amount, record the payment as usual (or let a matching bank transaction do it for you). BusyBee Hub realises the CIS deduction for that tax month automatically; you'll see it on the invoice's activity log and on the CIS page.
A part payment realises the deduction proportionally; the payment that finally settles the invoice takes whatever's left, so the two add up to the deduction due on the invoice: the deduction shown, less the share that any credit note on labour has taken back.
If you credit labour
A credit note on labour takes back the CIS deduction on that labour as well. Keep the Labour tick on the credit
note's lines (BusyBee Hub copies it from the invoice): a £120.00 credit note for £100.00 of labour takes back £20.00 of
CIS, so the contractor then owes £900.00 on a £1,200.00 invoice with £200.00 CIS, not £880.00. A credit note on
materials takes back no deduction.
If a payment is refunded
If you refund a contractor's online payment from your Stripe Dashboard, BusyBee Hub creates a credit note for the whole invoice value that the payment covered, before the CIS deduction (a £1,000 payment on a £1,200 invoice with £200 CIS gives a £1,200 credit note), and records the refund against it. The CIS the contractor deducted stays in your CIS records: it's theirs to correct, so ask them for a corrected payment and deduction statement, then update the deduction on the CIS page. The correction lands in the month the payment was received in, as your contractor's corrected statement does, not in the month of the refund. If the payment is returned instead (an invoice that wasn't fully paid, a lost card dispute, or a payment you return by hand from your bank feed), the invoice reopens and the recorded deduction stays in the same way. See Refund a customer.