Add CIS to an invoice
This article explains how to add CIS tax to an invoice if you’re a sole trader or limited company subcontractor.
To record CIS income, you can either follow the steps below to add CIS to your invoices for the contractor or explain the bank payments as CIS income if you’re not creating invoices in FreeAgent.
If you’re also a contractor, find out how to enter CIS transactions into FreeAgent as a contractor.
Please note:
- FreeAgent's CIS functionality won't be available if you have a partnership or an unincorporated landlord account.
- You need to set up CIS in FreeAgent and choose the relevant deduction rates before following the steps below to add CIS to your invoices.
Add CIS to an invoice
Once you’ve enabled CIS and chosen your deduction rates, you’ll have the option to select a ‘CIS Category’ when you create an invoice in FreeAgent.
Once this category has been selected, you can allocate invoice line items to the CIS income categories using the ‘Income Category’ drop-down menu. This tells FreeAgent to calculate a CIS deduction on that invoice line item.
If you need to operate the CIS reverse charge on your invoices, please read this guidance first.
To add non-CIS line items to the same invoice, select ‘Create and add another’ and make sure to select a non-CIS ‘Income Category’. FreeAgent will only apply a CIS deduction to the relevant line item(s).
You can view your CIS deduction total at the bottom of the invoice, where it will have been automatically deducted from the invoice total.
When the payments for the invoices import into FreeAgent via a bank feed or bank statement upload, explain them as an ‘Invoice Receipt’ and allocate them to the relevant invoices to mark them as paid. Please note that if you explain the payment as 'Sales', the invoice will remain unpaid in FreeAgent.
FreeAgent will automatically recognise the CIS deductions you've incurred when you explain payments you've received against your CIS invoices. The way these are handled depend on whether or not you're running payroll in FreeAgent. Learn more about how CIS deductions work in FreeAgent.