Hello again everyone
Ill start with what I understand on this topic. CIS stands for Construction Industry Scheme. So, when a job is taken by a construction company (a contractor) for say £12k including VAT, so £10k net. They then employ a subcontractor for say £6k, but no VAT is paid on this by the subcontractor and VAT cannot be claimed by the contractor. Instead the subcontractor pays CIS, which is similar to VAT in that it is 20%. However it is 20% of the total amount paid. So if £6k is paid to the subcontractor in this instance, CIS will be £1200 (correct me if I am wrong). Then the subcontractor will pay an individual who is essentially another subcontractor (e.g plumber) and he/she will pay CIS. What I want to understand about this is who has suffered CIS and who has had CIS deducted. Also, where does domestic reverse charge come into this and what exactly is it. I would also like to know the process for dealing with these types of invoices on VT software and also dealing with paying subcontractors on the Payroll Manager software.