Charging VAT when CIS registered.

mgrant

Good afternoon All,

I am hoping somebody can clarify this for me. I have a client who is CIS registered and has just registered for VAT. He has queried how to invoice this. He has asked me if he charges VAT on the net then deduct CIS from the gross.ie

Labour £50.00 + Materials £20.00 = £70.00 + VAT @ 20% = £84.00 - CIS @ 20% (£16.80) = £67.20

or

Labour £50.00 + Materials £20.00 = £70.00 - CIS @ 20% (£10.00) = £60.00 + VAT @ 20% (£12.00) = £72.00

Which is the correct method??

I have in the past done the 2nd but have looked at this on HMRC website and it advises 1st method.

Advice Please

T.C.

NEITHER - try this!
Do it in reverse:
Total invoice £84.00
Less VAT £14.00
Sub-total £70.00
less materials £20.00
Balance £50.00 @ 20 % = £10 (CIS deduction)
Amount to pay to subbie is £74

Does that make sense?

Gem7321

Neither.

Labour £50 + Materials £20 = £70 + VAT @ 20% = £84 invoice total

CIS deduction on labour only = £10

Total due to subcontractor = £74

T.C.

Hi Gem7321 - looks like we answered that at the same time - glad to see we had the same response!!!! :001_smile:

Gem7321

Cross-posted! Very glad TC!

reader

Very well explained- this forum is grrrrrrrrrrrrrrrreat!

RMD1

Hi

How do you claim the vat paid by us as a contractor for a vat registered subcontractor when doing quarter vat return?