CIS Deduction Calculator
CIS Deduction Calculator
One payment split the way the Construction Industry Scheme actually works, and what it costs a subcontractor when the deduction is taken on the whole invoice. Materials, VAT, plant hired in, consumable stores, fuel other than for travelling, prefabrication and any CITB levy you deducted all come off before the rate is applied. On a £4,000 invoice made up of £2,500 of labour and £1,500 of materials, the deduction for a registered subcontractor is £500. Not £800.
CIS Deduction Calculator
The Construction Industry Scheme deduction is calculated on the labour alone. Everything else on the invoice comes off first, and deducting on the total takes money that is not yours to hold.
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Three things worth knowing
The deduction is an advance payment of the subcontractor's tax and National Insurance, not a tax in itself. A company sets it against its PAYE month by month. A sole trader claims it on the self assessment return.
Plant the subcontractor hired in is excluded. Plant they own is not. The test is whether they are recharging a hire cost they actually paid.
Where you deduct the CITB levy from a payment, it is excluded from the gross amount of payment on the monthly return, so it does reduce the figure CIS is calculated on. HMRC's example is a £1,000 contract with a £7 levy, reported as £993.
The same thing for a whole month
The workbook does one payment and then a tax month of them, totalled into the three figures the monthly return asks for: total payments, total materials, total deducted.
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