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What Materials Qualify For CIS?

What Materials Qualify For CIS?

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What Materials Qualify For CIS?

Where you are required to take CIS deductions for a subcontractor, the CIS tax rate is applied from the VAT-exclusive costs of:

• Labour Element

• Travelling expenses/subsistence (including fuel and accommodation costs)

• Profit element only on materials

This means CIS does not apply to qualifying materials! It is therefore important to know what materials CIS applies to and doesn’t.

Qualifying CIS materials include:

• Material costs

• Plant hire if costs are incurred to a 3rd party (if the subcontractor owns the plant it is not deducted)

• Fuel for the plant and machinery


A contractor has received an invoice from a subcontractor. The verification process has been completed and has been instructed to deduct 20% as the CIS tax rate.

Labour £4,000

Materials £600

Plant Hire £300 (subcontractor)

The above totals £4,900 so you less the qualifying materials which are £900 = £4,000. This amount is then charged to CIS at the tax rate of 20%. This gives CIS to deduct of £800

If you need any further information regarding CIS message us today or take a look at our CIS Resource Hub here.

This article was written for Construction Insider and Saint Financial Group. Saint is a multidisciplinary group based in the UK that helps construction businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.

Saint provides the luxury of free business consultancy for all of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!

Written by:

Kim O'Rourke

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