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Xero, Sage 50 Accounts or BrightPay for a CIS Subcontractor

30 September 2026 11 min read

Xero and Sage 50 Accounts calculate CIS deductions on the labour element within their base plans but charge a separate add-on, £5 and £11 a month respectively, to verify subcontractors and file the CIS300 to HMRC. BrightPay's Windows desktop CIS module has wound down, and CIS now runs through BrightCIS, a standalone Bright product priced by subcontractor count with no published flat rate.

Written by Andrew McLean Studio Director at Disruptive Live

For a small CIS subcontractor, Xero calculates the deduction on invoice labour for free and only charges to verify subcontractors and file the CIS300. Sage 50 Accounts bundles calculation, verification and filing into one paid CIS v2 module, none of it free. BrightPay has retired its desktop CIS module, and CIS now runs through BrightCIS, a standalone product priced by subcontractor count with no flat public rate.

Key pointers

If you only receive CIS deductions and have no subcontractors or employees of your own, general bookkeeping software such as Xero or Sage 50 Accounts is the natural fit, not a payroll and CIS stack like BrightPay and BrightCIS.
If you also pay your own subcontractors or run PAYE for staff, you need the contractor-side tools: subcontractor verification and CIS300 filing. None of the three routes here gives you that for free; Xero and Sage price it as a flat add-on, Bright prices it as a separate BrightCIS subscription.
Split every subcontractor invoice into labour and materials before it reaches the software. CIS applies to labour only, and the vendor tools cannot fix a bad split after the fact.
Budget for the add-on, not just the headline plan price: Xero's CIS filing tools cost £5 a month on top of Ignite or any higher plan, and Sage's CIS v2 module is £11 a month plus VAT on top of Sage 50 Accounts.
BrightPay for Windows has already wound down for the 2026/27 tax year. If you were relying on its bundled desktop CIS module, you now need BrightPay Cloud for payroll plus a separate BrightCIS subscription for CIS, and should get a written quote for both rather than assuming the old desktop price still applies.
Give every subcontractor a payment and deduction statement within 14 days of the tax month end, and file the CIS300 by the 19th of that same calendar month, whichever software you use.
Verify each subcontractor's status with HMRC before the first payment. Getting the rate wrong is the contractor's liability, not a software problem the package can absorb for you.

How a CIS Deduction Moves From Verification to Reconciliation — Every payment under deduction follows the same HMRC-mandated sequence, whichever software calculates or files it.

What CIS Deduction Handling Means for a UK Subcontractor

Under the Construction Industry Scheme, a contractor deducts tax from a subcontractor's labour and pays it to HMRC as an advance against the subcontractor's own Income Tax and National Insurance bill. HMRC sets the rate when the contractor verifies the subcontractor: 20% if registered, 30% if not, or 0% if the subcontractor holds gross payment status (GOV.UK).

Many small subcontractors sit on both sides of the scheme at once. A groundworks firm that takes CIS deductions from a main contractor may also bring in its own labour-only gangs, which makes it a contractor for that part of its business. That dual role decides which software features actually matter. A pure subcontractor, who only receives deductions and never pays anyone else under CIS, mainly needs accurate labour and materials splitting on outgoing invoices, and a clear record of deductions suffered to support Self Assessment. A subcontractor that also pays its own subcontractors additionally needs HMRC verification, monthly CIS300 filing, and payment and deduction statements, the same obligations as any main contractor (GOV.UK).

This is why the three products in the query answer different halves of the question. Xero and Sage 50 Accounts are general bookkeeping software with CIS features layered on top, useful whichever side of the deduction you sit on. BrightPay is payroll software, and its current cloud version handles CIS only via BrightCIS, a separate Bright product for subcontractor verification, deductions and CIS300 filing. That combination only earns its keep if you are paying subcontractors, running PAYE, or both.

UK Compliance Mapping

CIS is a statutory HMRC scheme, not a voluntary standard. Applying the wrong deduction rate, missing a verification, or filing the CIS300 late are compliance failures with fixed financial consequences, not stylistic choices left to the software. A contractor that files a CIS300 one day late is charged £100; two months late, £200; six months late, £300 or 5% of the deductions on that return, whichever is higher (GOV.UK). None of Xero, Sage 50 Accounts or BrightPay can waive these penalties. They can only reduce the chance of missing the deadline, by calculating the deduction correctly and keeping the filing date visible.

A UK-hosted or UK-branded accounting package is not itself a compliance measure. What matters is whether the software applies the 20%, 30% or 0% rate to the correct base (labour only) and gets the return in on time, not where its servers sit. This is not legal advice; consult your legal counsel for CIS status disputes, gross payment status applications or penalty appeals.

Architecture Overview

The mechanics are the same regardless of which software processes them. A contractor first verifies the subcontractor with HMRC, which returns the applicable deduction rate. The contractor calculates the deduction on the labour element of the next payment, pays the subcontractor the net amount, and issues a payment and deduction statement within 14 days of the tax month end (GOV.UK). At the end of the tax month (which runs from the 6th to the 5th), the contractor files the CIS300 return with HMRC by the 19th, 14 days later. The subcontractor, in turn, reports the gross income and the CIS deducted on their own Self Assessment return, and any overpayment is refunded there rather than by the contractor.

Where the three products differ is which of these steps sit inside the base subscription and which need an add-on or a second product. Xero automates the calculation and record-keeping steps on every plan, but the verification and filing steps sit behind its £5 CIS add-on. Sage 50 Accounts separates CIS out almost entirely into its CIS v2 module, which handles verification, rate application and filing as one paid unit. BrightPay Cloud handles payroll only; the whole verification-to-CIS300 sequence runs through BrightCIS, a separate Bright application that shares subcontractor and deduction data back into BrightPay's P30 rather than living inside the payroll engine itself.

Pricing and Cost Model

All prices below are excluding VAT, checked live on 29 September 2026 against each vendor's own pages, and reflect the entry-level plan that can take each vendor's CIS filing option.

Software	Base plan with CIS calculations	Extra for verification and CIS300 filing	Combined entry cost
Xero Ignite	£18 a month	CIS add-on, £5 a month	£23 a month
Sage 50 Accounts Standard	From £115 a month	CIS v2 module, £11 a month plus VAT	From £126 a month
BrightPay Cloud (payroll only)	Quoted by active employee count, no published flat rate	BrightCIS, a separate subscription tiered by subcontractor count, no published flat rate	Two calculated quotes, not a single published price

Assumptions. Xero's £23 is simple addition of the published base and add-on prices (£18 + £5). Sage's £126 adds the £11 CIS v2 module to the Standard plan's "Starts from £115.00 +VAT/mo" on Sage's own product page, and the price rises further with extra users and companies. BrightPay Cloud and BrightCIS are both priced through the vendor's own calculator rather than a fixed rate card, so no comparable monthly figure can be shown without inventing one. Whichever software you are pricing, treat any headline monthly figure as a starting point and get a dated quote before budgeting. None of these figures include payroll, if you employ staff separately from your CIS subcontractors, or any partner or bookkeeper fees for setup and monthly processing.

BrightPay's Windows desktop edition, which used to bundle CIS handling into one flat annual licence, wound down at the end of the 2025/26 tax year. The product page that once listed those desktop prices no longer carries any pricing content, so a subcontractor still quoting the old desktop figures should treat them as retired and request current BrightPay Cloud and BrightCIS quotes instead.

For a subcontractor who only suffers deductions and never pays anyone else under CIS, none of the vendor add-ons above are relevant. Xero's and Sage 50 Accounts' base plans already record CIS suffered for Self Assessment, so the cheaper entry-level plan without the contractor add-on, such as Xero Simple at £7 a month for a non-VAT-registered business, is the realistic comparison in that case.

Vendor and Option Comparison

Capability	Xero	Sage 50 Accounts (formerly Sage 50cloud)	BrightPay Cloud + BrightCIS
Product type	Cloud bookkeeping software	Desktop accounting software with cloud connectivity	Payroll software (BrightPay Cloud) plus a separate CIS application (BrightCIS)
CIS deduction calculated on labour only	Included on every plan	Only with the separate CIS v2 module	Handled in BrightCIS, not BrightPay Cloud
HMRC subcontractor verification	Only with the £5 a month CIS add-on	Only with the separate CIS v2 module	Only with a BrightCIS subscription
CIS300 filed to HMRC from the software	Only with the £5 a month CIS add-on	Only with the separate CIS v2 module	Only with a BrightCIS subscription
Payment and deduction statements	Bulk email with the CIS add-on	Generated through the CIS v2 module	Generated in BrightCIS, gross deductions can flow into BrightPay's P30
Entry price excluding VAT	£7 a month (Simple, non-VAT registered, no CIS add-on); £18 a month (Ignite)	From £115 a month (Standard)	No flat rate; both BrightPay Cloud and BrightCIS are quoted by headcount or subcontractor count
Best suited to	A subcontractor who also invoices, tracks stock or manages general bookkeeping alongside CIS	A larger contractor needing desktop-grade job costing and stock control as well as CIS	A subcontractor that already runs, or is about to start, PAYE payroll on BrightPay and wants a discounted CIS add-on from the same vendor

No single product wins outright. A subcontractor who never pays anyone else under CIS gets no value from either BrightPay Cloud or BrightCIS, since both are built around paying people, not just recording what was received. A subcontractor who also employs staff and engages sub-subcontractors has to weigh two Bright subscriptions, discounted when bought together, against a single Xero or Sage add-on that already sits inside software they may already use for bookkeeping. A larger contractor already committed to desktop accounting for job costing has less reason to switch away from Sage purely over the CIS module price.

Expert Commentary

Editorial analysis. The clearest signal in this comparison is not which vendor calculates 20% correctly, all three do, but that none of them prices the parts of CIS that carry HMRC penalties, verification and filing, as a default included feature. Xero and Sage both treat those steps as a fixed add-on priced separately from the headline plan, which is easy to miss when comparing sticker prices. Bright has gone a step further and split them into an entirely separate product, BrightCIS, priced on its own calculator rather than a published rate. That makes BrightPay the hardest of the three to cost accurately in advance, even though it may end up the natural choice for a subcontractor already committed to BrightPay for payroll. The practical decision is less about which vendor's CIS engine is best and more about which side of the CIS relationship your business actually sits on, and how confidently you can get a written total from each vendor before committing.

Sources

Data & Insights

Published monthly add-on price to file CIS300 returns

Xero and Sage both publish a flat monthly add-on price; BrightPay's CIS route (BrightCIS) has no published flat rate, so it cannot be charted here.

View the data

Published monthly add-on price to file CIS300 returns
Category	Add-on cost (GBP/month)
Xero CIS add-on	£5.00
Sage 50 CIS v2 module	£11.00

Source: Xero, Sage pricing and support pages, September 2026

CIS deduction rate by subcontractor status

HMRC sets the rate when the contractor verifies the subcontractor.

View the data

CIS deduction rate by subcontractor status
Category	CIS deduction rate
Gross payment status	0%
Registered subcontractor	20%
Unregistered subcontractor	30%

Source: HM Revenue and Customs, GOV.UK

Frequently Asked Questions

Do I need CIS software if I only receive deductions and never pay a subcontractor?

Not the contractor-side tools. You mainly need your invoicing software to split labour and materials correctly and to keep a clear record of CIS deducted, so the figures are ready for Self Assessment. Xero and Sage 50 Accounts both do this on their base plans, without the CIS add-on or module that exists for verifying and paying subcontractors.

Why does Xero charge extra for CIS when its plan pages say CIS is included?

Xero includes the calculation, the suffered report and the payment and deduction statements on every plan. What sits behind the separate £5 a month add-on is filing the CIS300 return directly to HMRC, online subcontractor verification, and bulk-emailing statements (Xero). If you never file a CIS300 yourself, you may not need the add-on at all.

What does Sage's CIS v2 module actually add to Sage 50 Accounts?

It verifies subcontractors' CIS details with HMRC, applies the correct deduction rate to payments, and submits CIS returns online, including corrections and resubmissions. Sage sells it as a separate subscription on top of Sage 50 Accounts, at £11 a month plus VAT, rather than bundling it into the base plan (Sage).

Is BrightPay worth using if I don't run payroll for employees?

Rarely on its own. BrightPay Cloud is payroll software, built for paying employees, and CIS handling now sits in a separate Bright application, BrightCIS, not inside BrightPay itself. A subcontractor with no staff and no sub-subcontractors is unlikely to need either product; a subcontractor who does pay people, whether under PAYE or CIS, may still end up buying both.

What happens if my accounting software calculates the CIS deduction on the wrong base?

Liability for getting the rate and the base wrong sits with the contractor making the payment, not the software vendor. If the subcontractor has no evidence, such as receipts, that they paid for materials directly, HMRC's guidance tells the contractor to estimate the cost of the materials, so an unevidenced or badly split invoice leaves the deduction resting on an estimate regardless of which package processes it.

Is BrightPay's old desktop pricing still valid if I sign up now?

No. BrightPay for Windows, including the flat annual desktop tiers that used to bundle CIS handling, wound down at the end of the 2025/26 tax year, and its old product page no longer shows any pricing. New subcontractors need a BrightPay Cloud quote for payroll and a separate BrightCIS quote for CIS, and both are calculated on headcount or subcontractor count rather than published as a fixed price.

Back to All Articles

CIS deduction rates are 20% for a registered subcontractor, 30% for an unregistered one, and 0% for a subcontractor with gross payment status, as set by HMRC when the contractor verifies them.
The deduction applies only to the labour element of a payment. VAT, unusable consumable equipment, plant hire for the job, manufacturing or prefabricating materials, and materials the subcontractor paid for directly (with evidence) are removed from the invoice before the rate is applied. Fuel is removed too, except fuel used for travelling, which stays in the deduction base.
A payment and deduction statement must reach the subcontractor within 14 days of the end of each tax month.
A CIS tax month runs from the 6th to the 5th. The CIS300 return covering it is due at HMRC by the 19th, 14 days after that tax month closes.
Filing the CIS300 late costs £100 for one day late, £200 after two months, and £300 or 5% of the CIS deductions on the return (whichever is higher) after six months.
Xero includes CIS deduction calculations, a suffered report and payment and deduction statements on every plan, from Simple at £7 a month excluding VAT for non-VAT-registered businesses, or Ignite at £18 a month for VAT-registered ones.
Filing the CIS300 directly to HMRC, online subcontractor verification and bulk-emailed statements need Xero's separate CIS add-on, £5 a month on Ignite and every higher plan; it is not offered on Simple.
Sage 50 Accounts, the desktop-plus-cloud product formerly marketed as Sage 50cloud, starts from £115 a month excluding VAT on the Standard plan, per Sage's own product page. CIS management is an additional fee on top of the base plan.
Sage sells CIS handling as the separate CIS v2 module: subcontractor verification, correct deduction rates and CIS300 filing, for £11 a month plus VAT.
BrightPay's own pricing page states that BrightPay for Windows, which used to bundle CIS processing into its payroll module, "will be discontinued at the end of the 2025/26 tax year"; that tax year ended on 5 April 2026, so a subcontractor asking about desktop CIS today should confirm directly with Bright rather than assume it is still on sale.
CIS in the current Bright product line runs through BrightCIS, a standalone cloud application and a separate subscription from BrightPay Cloud, discounted for BrightPay Cloud customers. Neither BrightPay Cloud nor BrightCIS publishes a flat monthly price; both are quoted by headcount or subcontractor count.
None of the three vendors publish a like-for-like monthly price for a subcontractor who both suffers deductions and, separately, pays their own subcontractors, so the real comparison has to include whatever add-on or second subscription each route requires.