| CISR15600 | Action guide contents |
Where the payment made to the subcontractor is subject to VAT
(that is, where the subcontractor is a taxable person for VAT
purposes and the payment is in respect of a taxable supply) the
amount from which the deduction is made is the payment
exclusive of VAT. The subcontractor's gross
payment recorded on the monthly return should be the amount due
before VAT is added.
Where a payment made to a subcontractor only entitled to
payment under deduction, and who is a taxable person for VAT
purposes, includes an element representing the cost of materials,
the amount which may be excluded from the payment before deduction
is made is the VAT- exclusive cost of materials.
On the other hand, where the subcontractor is not registered
for VAT, any VAT they had to pay in purchasing any materials used
in the contract may be included in the cost of materials when
calculating the amount of the deduction.
From I June 1984, VAT is chargeable on all building and civil
engineering work except:
