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by

Björgvin Vigfússon

CIS returns & statements in Xero/QuickBooks/Sage (screenshots + step-by-step)

Who this is for: UK developers, main contractors, and specialist subs who want CIS month-end to run cleanly in their cloud stack—verify → calculate → statement → CIS300 → pay—with audit-ready records.

Why it matters: By law you must file the CIS300 by the 19th following the tax month (6th→5th) and pay deductions by the 22nd if electronic. You must also give each deducted-from subcontractor a Payment & Deduction Statement (PDS) within 14 days of month-end (i.e., by the 19th). HMRC allows filing via its online service or commercial software. GOV.UK

The month-end flow (same rhythm in all three: Xero / QuickBooks / Sage)

  1. Status & verification (before payment)
  2. Post the supplier bill correctly
  3. Approve & pay
    • Pay the net (after CIS) to the sub.
    • For DRC jobs, ensure your invoice template shows no VAT charged and the reverse-charge statement (VAT self-accounted by the customer). GOV.UK
  4. Issue PDS by the 19th
    • One per sub per tax month (or per payment), delivered within 14 days of month-end. Include the mandatory fields (see below). Keep a PDF copy in the job file. GOV.UK
  5. File CIS300 by the 19th; pay by the 22nd (electronic)
    • File via software or HMRC CIS Online; no negative values on returns. Reconcile totals to PDS before you submit. GOV.UK
    • Pay the month’s CIS deductions to HMRC (electronic payment deadline 22nd). GOV.UK

What your Payment & Deduction Statement must include

  • Contractor name and Employer PAYE reference
  • Tax month end (e.g., “Tax month ending 05 June 2025”)
  • Subcontractor name and UTR; verification number if 30% rate used
  • Gross paid (ex-VAT), materials/eligible plant deducted from base, amount liable to CIS, CIS deducted
    (HMRC example layout is in CIS340 Appendix E; HMRC also provides a blank template.) GOV.UK

Step-by-step in your software (with screenshot markers)

Add your own UI screenshots where marked; the exact clicks vary by version/plan. The logic below is consistent across Xero / QuickBooks / Sage because it follows HMRC’s rules.

A) Xero

  1. Supplier setup → tick CIS subcontractor, store UTR and verification number.
  2. Enter bill → split lines into Labour (CIS code) vs Materials (no CIS); for DRC jobs choose the Reverse charge VAT rate so no VAT is charged. GOV.UK
  3. Pay bill → Xero posts the CIS withheld to the control account and the net to Payables.
  4. Statements → run CIS Payment & Deduction Statements for the tax month; email to subs by the 19th. GOV.UK
  5. CIS300 → generate the month’s return; check totals match PDS; submit via Xero or export and file via HMRC; pay by the 22nd (electronic). GOV.UK

B) QuickBooks Online

  1. Supplier → mark as CIS subcontractor; store UTR/verification number.
  2. Bill → separate Labour (CIS on) and Materials (CIS off); for DRC, choose the domestic reverse charge VAT code so no VAT appears on the invoice. GOV.UK
  3. Pay → system withholds CIS; you pay net.
  4. PDS → run monthly CIS statements and email by the 19th; keep PDFs. GOV.UK
  5. CIS300 → create, review vs PDS, submit, and pay by the 22nd (electronic). GOV.UK

C) Sage (Accounting / 50)

  1. Supplier → enable CIS, add UTR/verification number.
  2. Bill → split labour/materials; apply CIS code to labour only; pick DRC VAT code if applicable. GOV.UK
  3. Pay → net to supplier; CIS withheld to control.
  4. PDS → run the month’s Payment & Deduction Statements; send by the 19th. GOV.UK
  5. CIS300 → generate, check vs PDS, submit, pay by the 22nd (electronic). GOV.UK

Reconciliation: make these three numbers agree

  • Sum of PDS deductions (all subs, that tax month)
  • CIS300 total for the month (pre-submission)
  • Payment to HMRC (made by the 22nd if electronic)
    If these don’t match, fix before filing HMRC can challenge credits/claims if PDS and returns diverge. (HMRC explicitly allows no negative values on CIS returns use zero and retain a working paper for corrections.) GOV.UK

Common mistakes (and quick fixes)

  • Late statements → PDS must be issued within 14 days after month-end (by the 19th). Lock a reminder. GOV.UK
  • Materials in the CIS base → Only labour attracts CIS. Keep your line splits clean. (See worked examples in our invoice guide.)
    → CIS invoice anatomy: labour vs materials
  • DRC wrong → If DRC conditions are met, no VAT on the invoice and the customer reverse-charges (unless they’ve written end-user/intermediary status). Keep that letter in your job file. GOV.UK
  • Forgot to re-verify → Re-verify subs not on your returns in the current/previous 2 tax years—otherwise you risk using the wrong rate. GOV.UK
  • Missed deadline → CIS300 due by the 19th; pay by the 22nd (electronic). Add both to your month-end checklist. GOV.UK

Quick GOV.UK reference

  • File CIS300 by the 19th (methods; declaration; penalties). GOV.UK
  • Make deductions & rates (0%/20%/30%). GOV.UK
  • Verify subcontractors (initial & re-verify rule). GOV.UK
  • PDS timing & fields (14-day rule; Appendix E example). GOV.UK
  • VAT DRC technical guide (reverse-charge wording; end-user/intermediary in writing). GOV.UK

Related internal guides