Tax and VAT, for a business of one
Four separate things take money off a trade invoice before it is properly yours, and each one has its own rules, its own dates and its own way of going wrong. This page is the map. Every figure on it and on the guides below comes from HMRC, with the rates last checked July 2026.
What comes off, and in what order
The order matters, because each one is worked out on what is left after the one before it.
On the invoice
VAT, if you are registered
Registration is compulsory once taxable turnover over any rolling twelve months passes £90,000. On construction work for another VAT and CIS registered business you charge no VAT at all and say so on the invoice instead.
Before you are paid
CIS, on subcontract work
A contractor deducts 20% of your labour, or 30% if HMRC cannot verify you, and pays it to HMRC in your name. Materials, VAT and plant hire come off first, so how the invoice is laid out decides the number.
After the year ends
Income tax and Class 4 National Insurance
Charged on profit rather than turnover: 20% plus 6% on everything above the personal allowance, with anything already deducted under CIS counting against the bill. Due 31 January, and once the bill is big enough, half of next year's goes with it and the other half follows on 31 July.
Four times a year
Reporting, under Making Tax Digital
Not a deduction, an obligation. Quarterly updates started at £50,000 of qualifying income on 6 April 2026 and reach £20,000 on 6 April 2028. Qualifying income is turnover, not profit.
The detail, one subject at a time
Each of these is a full answer rather than a summary, with the deadlines, the worked examples and the wording you can copy.
CIS deductions, and how you get the money back
What the contractor holds back from your labour, what has to come off the invoice before they work it out, and how the money comes back.
The VAT reverse charge, and what your invoice has to say
Why a VAT-registered trade invoicing another one charges no VAT, what the invoice has to say instead, and what it does to your cashflow.
Do you need to register for VAT?
The rolling threshold, the two tests, and what adding VAT does to a price you quote a homeowner who cannot reclaim it.
How much tax to set aside, and the January surprise
A percentage that survives a whole year, and the first January that arrives half as big again as anyone expects.
Making Tax Digital for Income Tax, in plain terms
Quarterly reporting, the thresholds and their dates, and why qualifying income is turnover rather than profit.
Work the number out
Free, no signup, and the rates behind them are the ones above rather than a figure somebody typed in once.
CIS deduction calculator
Working under CIS? See what the contractor holds back from your labour and what actually lands in your bank.
VAT calculator
Add VAT to a price or find the VAT hidden inside a total. Net, VAT and gross laid out clearly, at 20%, 5% or any rate.
Tax set-aside calculator
How much of every payment is actually yours? Get a percentage to move to savings so the tax bill never ambushes you.
The rest of the tools
Day rate, deposit, markup and margin, late payment interest. The numbers you work out before the job rather than after it.
The dates in a trade year
Which of these apply depends on how you work, and nobody meets all of them at once.
- The 19th of every month. A contractor who deducted from you owes you a payment and deduction statement within 14 days of the end of the tax month. Without it you cannot prove the deduction, and HMRC does not send subcontractors a copy.
- One month and 7 days after each VAT quarter. The return and the payment share a deadline, which is the part most often missed. Reverse charge work usually puts a subcontractor in a repayment position, and monthly returns get that money back sooner.
- 31 January and 31 July. The tax bill for the year that ended in April, plus payments on account of 50% each towards the year you are in. The first January they apply is the expensive one.
- 7 August, 7 November, 7 February and 7 May. Quarterly updates, once Making Tax Digital applies to you. They are reports rather than bills, and nothing is paid on the back of one.
What this page is not
It is an explanation of published rules, not tax advice, and it is written by people who build invoicing software rather than by accountants. Every statutory figure carries a source and a date, the rates were last checked July 2026, and where a rule has conditions tighter than a paragraph can hold, the guides say so instead of summarising them away.
SoloDesksdoes not file anything to HMRC and is not Making Tax Digital software. It keeps your quotes, invoices and payments in one place, with labour and materials itemised, so the numbers you or your accountant file from are already straight. A conversion job, an empty-property refurb or a first year with a mixed CIS and domestic book are all worth an hour of an accountant's time, and that hour is cheaper than the mistake.
Keep the records straight in the first place
Most of the money lost in this subject is lost on paperwork rather than on rates: a lump-sum invoice that let 20% of VAT or 20% of CIS land on the wrong figure, a statement never chased, a refund never claimed.