Labour and materials in one lump
The deduction comes off labour only. Put the two together on one line and the contractor either deducts from the whole amount, which costs you money, or hands it back for a rewrite.
Construction Industry Scheme
The CIS invoice the office will actually pay.
Labour split from materials, the deduction worked out at your rate, your UTR on the document. Written on your phone before you leave site.
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The problem
A CIS invoice gets rejected for boring reasons.
The wrong deduction rate
Registered subcontractors are deducted at 20 percent and unregistered ones at 30. Guessing on a spreadsheet template is how the figures stop matching the contractor's monthly return.
No UTR on the document
The office needs your Unique Taxpayer Reference to verify you before they can pay. Leave it off and the invoice sits in a pile until someone rings you for it.
What Bily does
One question on day one, then it is handled.
Bily asks once whether contractors deduct CIS from you. Say yes and every invoice from then on carries the right shape.
- Every line is tagged labour or materials, and the totals show each separately
- The deduction is calculated on labour at your rate and shown as its own line
- Your UTR and VAT number print in the header, next to the invoice number
- Amount payable is what lands in your account, with the deduction named in plain English
- The domestic reverse charge wording on the document, quoting VAT Act 1994 Section 55A
Invoice the contractor before you load the van.
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