If you deal with invoices from subcontractors they will be part of the Construction Industry Scheme, otherwise known as CIS. Once you have verified their details with HMRC they will tell you how to pay them and give you a verification reference number.
Once this has been established you can process their invoices and pay them. Normally the amount to be deducted from their invoices is 20% and this is held and paid over to HMRC on their behalf by you. To streamline the process and make the recording of their tax automatic, process their invoice in e-conomic recording the gross amount against the job. A credit note is then raised for the 20% to be paid over to HMRC. The subcontractor is then paid the difference, the net.
We have created step by step instructions within our Help to support this along with screen shots:-