I have taken over the book keeping of a small Audio Visual Limited company who is VAT registered and has been issuing VAT invoices to main contractor for works completed . The main contractor has then been deducting he normal 20% CIS but should they be doing this on a VAT invoice for labour and materials?
They are refusing to discuss the matter or provide evidence that, the deductions are being made are being paid to the Revenue, what they are doing about the VAT invoices submitted as they are deducting 20% from the total and where in the guidlines it says they are entitled to deduct CIS on a VAT invoice as I have not been able to find this.
Any help or pointers on where to find this in the guidlines would be greatly appreciated.
Thanks
James
Replies (3)
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You seem to be assuming that becoming VAT registered immediately exempts a business from having CIS deducted. It does not.
Unless your client obtains exempt status, they should have tax deducted on the VAT-exclusive figure (subject to any adjustments for materials) as normal. The contractor should be providing deduction certificates as normal.