UK CIS - materials Query


Joined
Oct 31, 2022
Messages
2
Reaction score
0
Country
United Kingdom
Hi,

I’ve been trying to establish what is permitted in terms of materials and deducting these costs for the purpose of CIS,when a subcontractor has been engaged by ourselves and purchased the materials solely for that particular project.

we would reimburse the subcontractor for both labour and materials, therefore we have our own expenses in regards to materials, albeit through the contractor.

In this scenario can we deduct the same value of materials on our own invoice (for the purpose of CIS) as the costs we’ve incurred from the subcontractor?

Any advice would be welcomed as the scenario is on the HMRC doesn’t cover this type of scenario explicitly.

Many thanks, Matt
 
Ad

Advertisements

Truemanbrown

VIP Member
Joined
Sep 1, 2011
Messages
125
Reaction score
5
If you start off with the obvious, you are considering the costs of, for example, bricks, paving slabs, piping and fixings that a subcontractor may supply as part of a construction project.

It also includes the cost of renting or hiring equipment or scaffolding.

It does NOT the cost of using plant or equipment owned by the subcontractor, although consumables such as fuel used in running the plant or equipment can be claimed.

Also, remember that CIS deductions is limited to the direct cost of materials used or to be used in carrying out the construction operations. What the subcontractor must not do is to try to profit by increasing these costs by adding a mark-up or passing on a notional charge for plant or equipment they already own.

If they ever did a compliance check, HMRC would expect contractors to have robust systems in place to check the materials costs being paid. If HMRC were to carry out a compliance check and consider that the materials supplied have been overstated, they will look to the contractor for the additional CIS tax that is considered to have been under deducted.
 
Ad

Advertisements

Joined
Oct 31, 2022
Messages
2
Reaction score
0
Country
United Kingdom
Thanks for your detailed reply, it’s appreciated.

but can I deduct the material costs on my invoice to the main contractor that a subcontractor has purchased but I’ve paid for when they’ve invoiced me?
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

UK CIS 2
CIS Scheme 1
CIS scheme 3
CIS 4 6
CIS Deductions 1
CIS Question 7
CIS Software 2
UK CIS subcontractor 1

Top