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Sam, Accountant
Category: UK Tax
Satisfied Customers: 13869
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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I am self employed and not vat registered. I have just won a

Customer Question

I am self employed and not vat registered. I have just won a contract with a company in the construction industry that is vat registered. Please can you advise: - if as I am not vat reg it is ok to just invoice with a note to say all prices including vat
- should I add 20% to my cost price to allow for the construction charge to works? - do I still get taxed on the remaining profit less the 20% CIS charges? - does it make a difference if I list costs to me as parts or labour?
Submitted: 1 year ago.
Category: UK Tax
Expert:  Sam replied 1 year ago.


Thanks for your question - I am Sam and I am one of the Uk tax experts here on Just Answer.

I cannot advise whether you should add 20% to your cost price - as this is up to you - and whether this is something you usually do to make a further profit but you do not undertake this at all just for the purposes of VAT - as you are not registered for VAT

But I can advise that you should mention nothing about VAT on your invoice (as you are not VAT registered) and should just lay out your invoice as your usually do - Labour plus Materials = Total invoice cost (and many mark up the materials)

If then the company for whom you will carry out this work feel it falls within the CIS scheme then they will tax you on the labour element only - and then should provide you with a statement of deduction (at least every month) for you to then take any tax suffered into account for your year end self assessment.

Let me know if you require any further assistance