VAT & CIS deductions................

[bigspark17]

billing a contractor for whom i sub for and just looking to the guys who have got previous of this scenario.

I billed him my toatal hours x agreed hourly rate. I added vat to the total and minus the cis (20% before adding vat) from the total. Now the contractor is saying i should minus the cis before adding vat.? There isnt a huge diference in the total 80-100£. But there is a diference and only 1way is correct...
thanks

 

[ED17]

£100 labour + VAT = £120. Then deduct 20% of £100.
£80 nett
£20 CIS deduction
£20 VAT

 

[bigspark17]

On your example he should be giving me a cheque /Bacs for £100 & cis voucher for £20 deducted..

 

[Deleted member 26818]

He pays VAT on the total, same as he does anywhere else.

 

[ED17]

On your example he should be giving me a cheque /Bacs for £100 & cis voucher for £20 deducted..

Yep and you pay the VAT man £20

 

[Deleted member 26818]

Depends what scheme you are on.
Could be you only have to pay the VAT man £15.