Hi, I’ve had a query from a subcontractor on the CIS scheme and his self assessment tax return.
KerryA8
Registered Posts: 2
Throughout the year he has had a material element on his invoices which he has not paid CIS tax on. Does he need to deduct these amounts from any other materials/ expenses he has incurred when conpleting his tax return or can they still be included as an expense?
0
Comments
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The amount would have been reimbursed by the contractor. He shouldn’t reclaim these as expenses as he would then be receiving tax relief on the amount as well as having it reimbursed1
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I do not agree with the above answer, I gave what I believe to be the correct answer in the other duplicate post.
Are you saying that these materials should not be included in the years turnover? If you are then this is wrong, if you do correctly include in the turnover but did not deduct the materials as a cost of sales then this would add to your clients profit and he/she would be liable to be taxed on this which again is wrong.
Materials are only included on the invoice so that the Sub-contractor does not have to have tax deducted from them, he/she then deducts them from the turnover as a cost of sales at the year end along with other expenses to leave the profit/loss figure which gives the final tax liability and then any tax deducted throughout the year are taken into account which leads to either a payment of tax or a tax refund.0
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