Deductions already taken, materials versus labour, and your usual year-end refund. Here's exactly how Making Tax Digital handles CIS if you're a self-employed subbie earning over £50,000.
Because CIS and MTD do two different jobs. CIS is money taken off you up front. MTD is how you tell HMRC what you actually earned and spent.
Nothing about your CIS deductions changes. What changes is that you report your income and expenses four times a year instead of once.
CIS only applies to labour. Split labour and materials on every invoice and your deductions, and your quarterly figures, stay accurate.
Record every CIS deduction taken from you so it's ready to set against your tax bill, no shoebox of statements needed in January.
Because 20% comes off your labour all year, many subbies overpay. The final declaration reconciles it so any refund still lands.
Paid gross with no deductions? You settle your tax through MTD reporting instead, with the same quarterly updates and final declaration.
You shouldn't need an accountant just to keep track of what's been deducted from your pay. Clear Books handles CIS for sole trader subcontractors out of the box.
Record your payments and deductions as you go, send your first quarterly update, and make the year-end refund the easy bit.
