Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): Value Added Tax (VAT)

Where payment is made to a subcontractor who is subject to VAT and the subcontractor is

  • uncertificated
  • unmatched or
  • registered for payment under deduction

the amount from which the deduction is made is the payment excluding VAT.

Where a payment made to the subcontractor includes an element representing the cost of materials, the amount which may be excluded from the payment before deduction is made is the cost of materials before the VAT is added.

Where a payment is made to a subcontractor who is subject to VAT and the subcontractor is

  • certificated or
  • registered for gross payment

the gross payment amount shown on any CIS voucher or monthly return (CIS300) should be the amount due before VAT is added.

If following the CI Caseworkers enquiries and checks, VAT evasion is suspected the caseworker should consider the guidance at COG909180.