4% deduction from invoice?

So I did a job a few weeks back, a kitchen rewire and small extension.  It always seemed a bit odd as the company doing it were an industrial training company who have branched out into building work.

Then it got more odd. After  submitting my invoice, their accounts dept contacted me asking for my NI number and tax UTR.

Today the bill has been paid, but they have paid 4% less than the invoice amount.  So far no paperwork from them, the money has just popped into my bank account.

I thought perhaps they have deducted tax at source under the CIS scheme, but that would be 20% and they would have to give me a tax deduction notification.

It could just be a mistake, or they could be disputing the invoice but you would think they would discuss it first.

Any ideas what the magic 4% might be for?

no idea, but id be telling them that unless its paid in full then it will be taken to small claims court

I'd have thought the best people to be ask would be the company you did the work for?

Or I might just say bog off if they want me to do more work.

Lurch said:

I'd have thought the best people to be ask would be the company you did the work for?

Click to expand...

I will, but thought I would ask here, someone might say "ah that will be......."

when I first started out self employed I did not even know about the CIS scheme and it was only when I started doing some work for a builder that I had to sign up for that so they could tax me at source (and claim most of it back again on my tax return)

There's a few things it could be. Early settlement discount deducted from wrong account (although that was commonly 2%), accounts department fat fingered the transfer, work order filled out wrong.....

Some main contractors withhold a small amount until the job is complete, then it's paid .... A retention payment.

that said I would ask them why they not paid in full

CITB 

Adrian said:

CITB 

Click to expand...

Ahh another group of leeches

But it think the citb levy is 1.25%

Main contractors discount. MCD.

they reckon it's for providing welfare facilities etc

written into my contracts that if there is to be an MCD then my price will be increased accordingly to account for this

We have customers who charge us a percentage ( deducted off invoices) for the privilege to be on their approved contractors list and also for early settlement. We are notified of these 

beforehand so,we add them on the quote, plus a little bit 

Sounds like a retention for the 12 month guarantee period to me  Dave  .

Main contractor's discount was 2.5%  IIRC .

CITB  I think , was 5% of your annual profit or was it turnover?       I never paid it. 

Was your invoice split into materials and labour if so does the deduction equate to 20% of the labour value

Or more likely is it just a scam? 4% may not be a lot on a small job, but on a big job it could add up to quite an amount, maybe just maybe, they think people won't notice, after all you've been paid, maybe they hope you'll just look at your bank statement and see, "payment from such and such" and think "oh,I've been paid"

Well I have the answer

Hi Dave
The reply from the book-keeper was:
20% deduction for tax on his labour figure.
 

Click to expand...

I have asked for a certificate of tax deducted.

I would love to see their workings out, as labour was about 3/4 of the invoice value (and it was itemised separately) so if they deducted 20% from the labour figure, it would be a lot more than 4% of the total.

So this was a CIS deduction?

Was I&T included in your job?

I&T is a professional service and is exempt from CIS.

I hated the  CIS  scheme with a vengeance .

What is CIS?

Sidewinder said:

So this was a CIS deduction?

Was I&T included in your job?

I&T is a professional service and is exempt from CIS.

Click to expand...

I&T was included, but not invoiced separately, just included in the "labour" bit.  they did not forewarn me that they were likely to deduct tax under the CIS scheme.

Tony S said:

What is CIS?

Click to expand...

https://www.gov.uk/what-is-the-construction-industry-scheme

I have been registered under the CIS scheme for some time but it's the first time for a few years I have had a CIS deduction.

Tony S said:

What is CIS?

Click to expand...

Coop Insurance Society