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Post Info TOPIC: Calculation for working out CIS deduction
Carol


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Calculation for working out CIS deduction
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Hi,

Does anyone know the correct way to calculate  cis deductions in construction industry. Secondly,If the invoice is to show Labour 1/3rd Materials 2/3rd should this be on the net figure or gross figure including vat.

Regards,

Carol



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Peasie


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An example if original invoice was for £4500 excluding VAT.

Invoice (Labour and materials)4500.00  
20% VAT900.00  
Total5400.00  
    
    
Invoice split  Tax @ 20%
Labour (one third)1500.00 300.00
Materials (two thirds)3000.00  
 4500.00  
20% VAT900.00  
 5400.00  
    
    
Contractor is paid £5100.00 (£5400.00 less £300 Tax) 
HMRC are paid £300 (or monthly PAYE bill is reduced by £300)


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VinceH


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"HMRC are paid £300 (or monthly PAYE bill is reduced by £300)"

I like your way of thinking, and so do my clients! wink



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Carol


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Thanks for your help.

One more thing have now been told it should be 74% materials & 26% labour instead. Do you know if there is an actual calculation that should be use.confuse



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Peasie


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Carol wrote:

Thanks for your help.

One more thing have now been told it should be 74% materials & 26% labour instead. Do you know if there is an actual calculation that should be use.confuse

Personally speaking I've only had limited experience of CIS and it was just a case of stating a specific amount for Labour and Materials rarther than a percentage of the total bill. And there was a tendancy to maybe be a bit generous with what was materials compared to what was labour. 



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