One difference that matters: CIS included, no add-on required
Most accounting software comparison articles treat Xero and QuickBooks as near-identical alternatives for small businesses, differing mainly on interface preference. For CIS contractors and subcontractors, there is a concrete cost difference that those comparisons tend to understate: QuickBooks includes CIS300 direct filing, subcontractor verification and deduction statements in its base plan price. Xero requires a £5 a month add-on for the same capabilities.
Over a year that is £60. Over three years it is £180. For a sole-trader contractor on the entry plan, the comparison is £16 a month with QuickBooks against £21 a month with Xero, for an identical set of CIS filing features. The difference is not dramatic, but for a business where margins are tight, it is worth making the calculation consciously rather than defaulting to whichever name comes up first in a search.
This guide covers how QuickBooks handles CIS in practice, the current plan pricing verified in June 2026, step-by-step setup, and the key scenarios where QuickBooks is the stronger choice. The full comparison across QuickBooks, Xero, Sage and FreeAgent is in the best CIS accounting software guide.
QuickBooks UK pricing: current plans (checked June 2026)
| Plan | Monthly price (excl. VAT, checked June 2026) | CIS included | CIS300 HMRC filing | Users |
|---|---|---|---|---|
| Self-Employed | £10 | No | No | 1 |
| Simple Start | £16 | Yes | Yes (included) | 1 |
| Essentials | £33 | Yes | Yes (included) | 3 |
| Plus | £47 | Yes | Yes (included) | 5 |
| Advanced | £115 | Yes | Yes (included) | 25 |
The Self-Employed plan is designed for freelancers and self-employed people who invoice for personal services and do not have subcontractors. It does not include any CIS contractor or subcontractor functionality. Simple Start at £16 a month is the entry point for all CIS features, whether you are a subcontractor recording income or a contractor filing monthly CIS300 returns.
Payroll is not included in any QuickBooks plan by default and is available as a paid add-on. If you have employees as well as CIS subcontractors, budget for the payroll add-on on top of the plan price.
What QuickBooks CIS covers
CIS deduction calculations. QuickBooks calculates CIS deductions automatically based on the deduction rate set for each subcontractor (0% for GPS, 20% for registered, 30% for unregistered). Deductions apply to the labour element of payments only: materials are excluded from the deduction base. This is one of the most commonly misapplied rules in CIS, and handling it automatically at invoice level reduces the risk of over-deducting from a subcontractor who correctly separates labour and materials on their invoices.
CIS300 direct filing. QuickBooks submits the CIS300 monthly return directly to HMRC through HMRC's API. The return is generated from the subcontractor payments recorded in QuickBooks during the tax month, and you review and submit it from the CIS centre. From April 2026, nil returns are also submitted through this same workflow for months with no subcontractor payments.
Subcontractor verification. Before making the first payment to any subcontractor, a contractor must verify their CIS status with HMRC. QuickBooks runs the verification in-app, returning the correct deduction rate (0%, 20% or 30%) and recording it on the subcontractor's record. To meet the should-have-known standard under Finance Act 2026 s.220 (in force from 6 April 2026), HMRC expects contractors to take this and related due-diligence steps, protecting against GPS revocation on "knew or should have known" grounds.
Deduction statements. QuickBooks generates deduction statements from the payment data and can bulk-email them to subcontractors. The 14-day deadline for issuing deduction statements after each payment is a legal requirement, and bulk emailing from within the software makes compliance with that deadline practical even for contractors paying many subcontractors.
DRC VAT. QuickBooks supports the domestic reverse charge for construction services (in force since March 2021 and unchanged by Finance Act 2026). When the DRC applies, the customer-side VAT code ensures the output and input tax appear in the correct VAT return boxes. The guide to the domestic reverse charge explains which supplies are within the DRC scope.
Setting up CIS in QuickBooks: step by step
The steps below cover the contractor setup, including connecting to HMRC and configuring subcontractor records. If you are a subcontractor who only receives CIS deductions and does not file CIS300 returns, the key steps for you are entering your UTR correctly and tracking income and expenses against the right account codes.
- Enable CIS in settings. In QuickBooks, go to Account and Settings, then Advanced, and enable CIS under the Contractor section. Enter your employer PAYE reference and your UTR. These link your QuickBooks account to your HMRC filing identity.
- Connect to HMRC. In the Taxes section, select CIS and connect to your HMRC Online account using your Government Gateway credentials. This authorisation enables in-app verification and direct CIS300 submission.
- Add subcontractor contacts. For each subcontractor you pay, create a supplier contact and enable the CIS subcontractor toggle. Enter the subcontractor's UTR and their trading name as registered with HMRC. Run the in-app verification to confirm their deduction rate before the first payment.
- Record payments with labour/materials split. When recording a payment or bill from a CIS subcontractor, split the invoice lines between the labour element and any materials. QuickBooks applies the CIS deduction rate only to the labour lines. A clear split on every subcontractor invoice is essential for accurate deduction statements and the CIS300 return.
- Configure DRC VAT if VAT-registered. If your business is VAT-registered and receives DRC invoices, set up the domestic reverse charge VAT rate in QuickBooks. Apply the DRC code to applicable invoice lines when recording bills from subcontractors who are also VAT-registered and where all five DRC conditions are met.
- File the monthly CIS300. At the end of each tax month (the 5th), navigate to Taxes, then CIS, and review the return for that month. QuickBooks generates the return from your payment data. Submit by the 19th of the following month. If no payments were made, file a nil return.
Worked example: contractor pays £1,000 to a verified subcontractor
A main contractor pays a verified (registered) subcontractor £1,000 for a job. The subcontractor's invoice shows £700 labour and £300 materials.
| Line item | Amount | CIS applies? | CIS deduction (20%) |
|---|---|---|---|
| Labour | £700 | Yes | £140 |
| Materials | £300 | No | £0 |
| Total invoice | £1,000 | £140 |
In QuickBooks, the contractor records the subcontractor's bill with these two lines. QuickBooks calculates the £140 CIS deduction on the £700 labour line only. The net payment to the subcontractor is £860 (£1,000 minus £140). The £140 is held as a CIS liability in QuickBooks until it is paid to HMRC as part of the monthly CIS300 settlement. The deduction statement issued to the subcontractor shows all four figures: gross payment (£1,000), materials excluded (£300), labour charged (£700), and CIS deducted (£140).
This labour-only deduction base is one of the most important rules in CIS. A subcontractor who does not split labour and materials on their invoices risks having CIS applied to the full amount, including the materials cost, which produces an over-deduction that they then have to recover through Self Assessment. The guide to the CIS monthly return covers how the CIS300 reports these figures to HMRC.
Bureau Payroll mode for accountants
QuickBooks Bureau Payroll is designed for accountants and bookkeepers who manage CIS and payroll for multiple construction clients. Rather than each client having their own QuickBooks subscription with a separate HMRC connection, the bureau model allows the accountant to manage filings across a client portfolio from a centralised interface. This is relevant for CIS agents who file CIS300 returns and manage deductions on behalf of a group of main contractors.
If you are a business owner rather than an accountant, you will use the standard contractor CIS workflow rather than Bureau Payroll mode. If you use an accountant who works across multiple QuickBooks construction clients, they may be using Bureau Payroll mode to handle your CIS300 filings.
QuickBooks vs Xero for CIS: the practical comparison
| Feature | QuickBooks Simple Start | Xero Ignite |
|---|---|---|
| Monthly price (excl. VAT, checked June 2026) | £16 | £16 (+£5 for CIS filing = £21) |
| CIS300 direct HMRC filing | Included | £5/mo add-on required |
| In-app subcontractor verification | Included | Add-on required |
| Deduction statements | Included | Add-on required (bulk email) |
| DRC VAT support | Yes | Yes |
| MTD ITSA (sole trader) | Yes | Not on Ignite (Grow plan required) |
| Annual cost difference (CIS contractor) | £192 | £252 (Ignite plus add-on) |
For a CIS contractor, QuickBooks Simple Start is the lower-cost option at equivalent functionality. Xero's advantage is its interface, which many users find cleaner for high-volume invoicing. If you have a strong preference for Xero's layout and the £60 annual difference is not a deciding factor, Xero with the add-on is a sound choice. If the cost comparison matters, QuickBooks delivers the same filing capability for less. The Xero CIS guide covers that product in the same level of detail as this guide.
CIS300 deadlines and what happens if you miss them
The CIS300 monthly return is due by the 19th of the following tax month. Tax months run from the 6th to the 5th, so the return for the month ending 5 June is due by 19 June. Payment of the deducted CIS to HMRC is due by the 22nd electronically or the 19th by cheque.
From April 2026, nil returns are required in months with no subcontractor payments. QuickBooks files nil returns through the same CIS300 workflow. Missing either type of return triggers the same penalty ladder: £100 for one day late, £200 at two months, £300 or 5% of the CIS liability at six months, and £300 or 5% at twelve months, with a further penalty of up to £3,000 or 100% where information is withheld deliberately. These are per-return penalties, so a contractor who misses three consecutive nil returns during a quiet winter period faces three separate penalty charges.
The HMRC CIS helpline for filing queries is 0300 200 3210, Monday to Friday 8am to 6pm. The full penalties guide is at CIS penalties and appeals.
Who should choose QuickBooks for CIS
QuickBooks Simple Start at £16 a month is the strongest choice for: sole-trader and limited-company subcontractors who want CIS income recording plus MTD ITSA in the base price; small to medium contractors who pay up to 10-15 subcontractors monthly and want CIS300 filing included without an add-on; and businesses where the per-employee payroll add-on is manageable because staffing is small.
QuickBooks Essentials (£33) or Plus (£47) makes sense when you need more users, project tracking or inventory features alongside the CIS work.
Sage Standard at £30 a month is worth considering if you have employees and want bundled payroll, or if phone support is important near filing deadlines. The Sage CIS guide covers that product in detail, including its bundled payroll and phone support position.
If you want to see your CIS tax position before committing to software, the CIS refund estimator gives a quick figure. For limited company directors, the CIS limited companies EPS guide covers how the in-year payroll reclaim works alongside your accounting software.