Do businesses still deduct CIS with the new reverse charge VAT?

Ellie0sully

Hello,

I would love some help with this. I have been researching for most of the day and haven't found anything helpful.

I would really love to know whether CIS is still deducted with domestic reverse charge VAT on an invoice. I think yes, because the new change have (in theory) only effected the VAT charged. However, I have noticed that a couple of my client's suppliers have changed their VAT but not deducting CIS. My client has confirmed that it is subcontractor work, so I am slightly confused.

I have read that, if you are invoicing someone and they are registered then you allocate the DRC, even if you are not registered for CIS yourself. I guess this could be the case for the example above.

One website that I have found that says it is https://desktophelp.sage.co.uk/sage200/professional/Content/General/CIS reverse charge FAQs.htm. However, I can't seem to find anything else.

Any help with this would be great, thank you

douglasstroud

Yes CIS still needs to be deducted the same as before nothing has changed regarding this

douglasstroud

And just to add further, if the work being carried out falls within the CIS then both parties should be registered as either contractors or sub-contractors so that that the DRC applies (obviously as long as both are VAT registered)

Ellie0sully

Brilliant thank you douglasstroud! This helps loads.
I thought they would both have to be registered, but I wanted to confirm I was correct.

livintiv

douglasstroud said:

And just to add further, if the work being carried out falls within the CIS then both parties should be registered as either contractors or sub-contractors so that that the DRC applies (obviously as long as both are VAT registered)

Except in the case of one being classified as an end user, in which case the DRC would not apply (I realise this isn't the original question, but I deal with it at work a bit and it can cause a bit of back 'n forth!).

douglasstroud

Both parties need to be CIS registered for the DRC to exist which was the point the OP asked there is no ‘except’
If the contractor is the end user by maybe having work done on their premises then it is their responsibility to tell the sub-contractor.