I have a 'situation' where a CIS contractor sometimes has their CIS subcontractors purchase tools which the contractor then reimburses them for. These tools are/will be considered assets in the contractors accounts.
Should the contractor be deducting CIS in this setup?
I appreciate the easy answer is for the contractor to purchase those tools themself, or load prepaid cards or something of that nature but the client says this is not an option due to their work setup.
Would it make any difference if the tools purchased were in the contractors name, still purchased by the subcontractor for the contractor?
I can only see 5 specific reasons on CIS340 where CIS shouldn't be deducted and purchasing tools for the contractor isn't one of them. I'm wondering am I missing anything? For example the payment is for a tool which the subcontractor is simply giving directly to the contractor - perhaps outside the scope of CIS?
Any help is greatly appreciated.