Splitting labour and materials

[RSmith2.]

We are a small limited company and subcontractor. We are CIS and VAT registered currently supplying labour only and understand the CIS deductions and reverse charge on labour.

We are looking to take on some small jobs that will involve supplying materials. Are we required to split the two when we invoice? I understand if we don't then we'll be deducted CIS on the full amount, but is there any requirement to separate them? Also, I just want to double check that both the labour and materials are subject to the reverse charge.

 

[DWS]

We are a small limited company and subcontractor. We are CIS and VAT registered currently supplying labour only and understand the CIS deductions and reverse charge on labour.

We are looking to take on some small jobs that will involve supplying materials. Are we required to split the two when we invoice? I understand if we don't then we'll be deducted CIS on the full amount, but is there any requirement to separate them? Also, I just want to double check that both the labour and materials are subject to the reverse charge.

No requirement to separate labour & materials as long as you don’t mind the CIS deduction on the full amount.
Yes both labour & materials are subject to the DRC if being supplied together, obviously checking that the client is not an end user and also that they are VAT registered so you can apply DRC

 

[Bud1977]

No requirement to split them if you're happy taking the CIS deduction on the full amount — but if you do split them, it's worth double-checking the maths on what's actually being deducted from labour vs what's exempt as materials. I built a quick calculator for exactly that split if useful: sitedocket.co.uk/cis-calculator.html

 

[DWS]

No requirement to split them if you're happy taking the CIS deduction on the full amount — but if you do split them, it's worth double-checking the maths on what's actually being deducted from labour vs what's exempt as materials. I built a quick calculator for exactly that split if useful: sitedocket.co.uk/cis-calculator.html

No disrespect, but why would you need to build a ‘quick calculator’?
You know the labour charge so you just deduct 20% or 30% from it

 

[TaxBix]

One to watch when you start buying materials: only your actual cost comes out before the deduction. Any margin you add to them still gets caught.