Construction compliance guide
Best CIS Software for UK Builders and Contractors
If you pay subcontractors, the Construction Industry Scheme is a monthly legal obligation. Here are the tools that handle it — ranked honestly, including HMRC's free option. And one thing up front: The Site Book is not one of them, and we explain why.
TL;DR
If you pay subcontractors, CIS is not optional: verify them with HMRC, deduct at the right rate, file monthly returns. FreeAgent has the strongest built-in CIS workflow for small firms; Xero and QuickBooks handle it well inside a full accounts package; Sage suits finance teams; HMRC's free service works at very low volumes. None cover your health and safety paperwork — that is a separate lane.
In this guide
What CIS software actually does
Under the Construction Industry Scheme, a contractor paying subcontractors must verify each one with HMRC before the first payment, deduct tax from their payments at the rate HMRC confirms, give each subcontractor a statement of what was deducted, and file a monthly return. The full rules are in HMRC's CIS 340 guide. HMRC has also announced administrative changes to the scheme taking effect from April 2026 — check GOV.UK for the current position rather than relying on any third-party summary, including this one.
CIS software automates that loop: verification from inside your accounts, deductions calculated on each bill at the verified rate, statements generated automatically, and the monthly return pre-filled from what you actually paid. The tools below all do this — the ranking is about who each one fits.
How we ranked these tools
Full disclosure: The Site Book does not sell CIS software, so we have no product to push in this list. We build the health and safety half of a contractor's compliance stack, our customers ask us about the tax half constantly, and this is the answer we give them. The ranking weighs how completely each tool covers the CIS loop, and who it genuinely fits — a sole trader paying two subbies has different needs from a firm with a finance team. We deliberately avoid quoting prices: they change, plans vary, and the vendors' own pricing pages are the only current source.
#1 FreeAgent — strongest CIS workflow for small contractors
FreeAgent treats CIS as a first-class feature rather than an add-on: subcontractor verification runs from inside the app, deductions are calculated automatically at the verified rate on each bill, deduction statements are generated for your subcontractors, and the monthly return files to HMRC from the same screen. For subcontractors, CIS deductions suffered flow through to Self Assessment.
It is built for sole traders and micro businesses, which is exactly where most CIS-paying builders sit. If your accounts are simple and CIS is your main tax headache, this is the shortest path to getting it handled.
#2 Xero — CIS inside a full accounts platform
Xero's CIS support covers the contractor workflow — verify subcontractors, calculate deductions on bills, produce statements, and file monthly returns — with the full CIS feature set available as an add-on to its standard plans.
The reason to choose Xero is usually the rest of the platform: if your accountant works in Xero, or you are past the sole-trader stage and need proper multi-user accounts, payroll, and app integrations, having CIS inside the same system beats bolting on a separate tool.
#3 QuickBooks Online — built-in CIS for existing QuickBooks users
The UK edition of QuickBooks Online includes CIS in its core product: turn it on, and subcontractor verification, deduction calculations on bills, deduction statements, and monthly return filing are all handled inside your existing bookkeeping.
If you already run your accounts in QuickBooks there is no reason to look elsewhere for CIS. If you are choosing fresh, the decision usually comes down to which ecosystem your accountant prefers rather than CIS capability differences.
#4 Sage — CIS for established finance teams
Sage covers CIS across its range — from Sage Accounting for smaller firms to Sage 50 with its CIS module for businesses with a dedicated finance function. The workflow covers verification, deductions, statements, and monthly returns, with the depth of reporting and audit trail that larger contractors and their auditors expect.
It is rarely the pick for a sole trader — the value shows up when payment volumes are high, several people touch the books, and CIS is one compliance stream among many.
#5 HMRC's free CIS online service — the workable baseline
HMRC's own online service does the two legally required jobs for free: verify a subcontractor before you first pay them, and file your monthly CIS300 return. For a contractor paying one or two subbies, this plus a disciplined spreadsheet is a legitimate setup.
What you give up is everything around those two steps — deduction calculations, statements for your subcontractors, and any connection to your accounts all stay manual. That is where errors and missed deadlines come from as volume grows, and it is the honest case for paying for one of the tools above.
CIS is the tax half — don't forget the safety half
Every contractor paying subcontractors on site is running two compliance lanes at once. CIS is the tax lane. The safety lane — CDM 2015 — is the one that requires RAMS, a Construction Phase Plan, site inductions, and evidence that your subcontractors' people were inducted and competent before they started. Our guide to what documents subcontractors need covers that side in detail.
That lane is what The Site Book does: RAMS, CPPs, COSHH, site inductions, toolbox talks, and worker records, generated from one project setup and bundled into an audit-ready pack. Pick a CIS tool from the list above for HMRC, and pair it with health and safety software for the HSE — the two together are the whole compliance story.
Dedicated CIS software vs HMRC's free service
Pros
- Deductions calculated automatically at the verified rate — no rate looked up wrong under deadline pressure.
- Payment and deduction statements generated per subcontractor, every month, without a spreadsheet.
- Monthly CIS300 returns pre-filled from actual payment records and filed from the same system.
- One audit trail: verification, payments, deductions, and returns in one place if HMRC comes asking.
Cons
- It is another subscription — at one or two subcontractors, HMRC's free service plus discipline is genuinely enough.
- CIS features are usually tied to a full accounts package, so switching CIS tool can mean switching bookkeeping.
- Software does not remove the legal duty: verification before first payment and the filing deadline are still yours.
- None of these tools touch H&S compliance — RAMS, CPPs, and inductions are a separate lane entirely.
| Tool | Verify subcontractors in-app | Files monthly CIS300 | Deduction statements | Best for |
|---|---|---|---|---|
| FreeAgent | Yes | Yes | Yes | Sole traders and micro contractors |
| Xero (CIS add-on) | Yes | Yes | Yes | Growing firms working with an accountant |
| QuickBooks Online (UK) | Yes | Yes | Yes | Small firms already on QuickBooks |
| Sage Accounting / Sage 50 CIS | Yes | Yes | Yes | Established firms with a finance function |
| HMRC CIS online (free) | Yes | Yes | Manual | Very low subcontractor volumes |
“Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor's payments and pass it to HM Revenue and Customs (HMRC).”
Frequently asked questions
Do I actually need CIS software?
It depends on volume. If you pay one or two subcontractors occasionally, HMRC's free CIS online service — verify the subcontractor, file the monthly return by the 19th — is workable, and plenty of small contractors run that way. The case for software builds as volume grows: automatic deduction calculations at the verified rate, deduction statements generated for each subcontractor, monthly returns pre-filled from your payment records, and an audit trail if HMRC asks questions. If CIS admin is costing you hours each month or you have ever missed a return deadline, software pays for itself quickly.
Can I run CIS for free through HMRC?
Yes. HMRC provides a free CIS online service for contractors: you can verify subcontractors before first payment and file your monthly CIS300 returns through it. What it does not do is the surrounding bookkeeping — calculating the deduction on each invoice, producing payment and deduction statements for your subcontractors, or connecting any of it to your accounts. Those gaps are what the paid tools fill. For a contractor paying a handful of subbies, free plus discipline works; past that, the manual steps are where mistakes and penalties creep in.
What is the difference between CIS compliance and CDM compliance?
They are two different legal regimes that both land on construction contractors. CIS — the Construction Industry Scheme — is tax: HMRC rules about deducting money from subcontractor payments and reporting it monthly. CDM 2015 is health and safety: the regulations that require RAMS, Construction Phase Plans, site inductions, and a managed site. The software markets are separate too — accounts packages handle CIS, and tools like The Site Book handle the CDM side. A contractor paying subcontractors on site typically needs both lanes covered.
Does The Site Book handle CIS?
No — and we would rather say that plainly than imply otherwise. The Site Book covers the health and safety half of a contractor's compliance: RAMS, Construction Phase Plans, COSHH assessments, site inductions, toolbox talks, worker records, and the audit trail behind them. For CIS you need an accounts or payroll tool from the list above (or HMRC's free service). The two work side by side: your accounts package proves you paid subcontractors correctly, and The Site Book proves your site was run safely.
Related guides
What Documents Do Subcontractors Need?
RAMS, insurance, CSCS cards, and the rest of the pre-start pack.
What Paperwork for a Construction Job?
The full checklist across tax, insurance, and safety.
Best Tools for Builders Paperwork
The safety-paperwork side of the software stack, ranked.
What is CDM?
The safety regulations that sit alongside CIS.
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Sources
- What is the Construction Industry Scheme (CIS)? — GOV.UK · Accessed 4 July 2026
- Construction Industry Scheme: a guide for contractors and subcontractors (CIS 340) — GOV.UK · Accessed 4 July 2026