Do I deduct CIS tax on the cost of materials, or just labour?
A subcontractor's invoice includes both their labour and the cost of materials they bought for the job — do I deduct CIS from the whole amount?
Asked by Anonymous on 24 November 2025
1 Answer
CIS deductions apply only to the labour element of a subcontractor's invoice, not to the direct cost of materials, provided the materials cost is genuinely what the subcontractor paid and is shown separately on the invoice. If materials aren't clearly broken out, HMRC may expect you to deduct CIS from the full amount, so it's important to get subcontractors to itemise materials clearly. Keep the supporting evidence (receipts or a reasonable breakdown) in case HMRC asks to see how the materials figure was calculated.