Deductions your client withholds

When a client keeps back a statutory deduction, print it on the invoice so their payment matches.

Some clients are required to keep back part of what they pay you and hand it to the tax authority themselves — a labour-based withholding scheme such as CIS in the UK, RCT in Ireland or TDS in India. If your invoice asks for the full total, their payment never matches it.

Maliru prints the deduction on the document: the Total, then Less the deduction, then the Amount payable your client will actually send. It prints the figure; it does not register you for any scheme or file anything.

Most businesses need none of this. Only set it up if a client withholds tax from what you invoice. All of it needs Manage commercial.

1. Set up the scheme

Open Commercial › Invoices › Document settings › Deductions and choose Add scheme. The menu offers the schemes Maliru knows for the countries it has suggestions for, or Custom scheme… to write your own.

Document settings › Deductions with a scheme set on the labour element at three rates

Name — what the document prints after Less, for example CIS deduction.
Basis — Labour element (the deduction is taken only on the labour part of the work) or Whole net amount.
Rates (%) — the rates the scheme uses, comma separated, such as 20, 30, 0. You pick one per client.
Printed note (multiline, optional) — wording printed on documents that carry the deduction.

A workspace can hold up to six schemes. A scheme does nothing until a client uses it.

2. Turn it on for the client

Open the client under Clients, expand Billing and set:

Deduction they withhold — the scheme, or None.
Deduction rate % — the rate this client applies. The hint lists the scheme's rates; left blank, the first rate is used.

These fields only appear once a scheme exists in Document settings.

3. Tell Maliru what is labour

A labour-based scheme needs to know how much of each price is labour. Every rate item has a Labour share, which starts at 100%. Correct it under Commercial › Rate cards, on the card, by opening the item (Edit rate item), or map a Labour % column when you import the card. A line priced from an item that is part materials then only counts its labour share.

What prints

On an invoice or application for that client, the totals read:

Subtotal, then Retention withheld and Net if the contract holds retention;
the tax line;
Total;
Less CIS deduction (with its rate and the base it was taken on) — a minus figure;
Amount payable — the total minus the deduction.

The deduction is taken on the net before tax. On the labour basis, the base is the labour share of the lines, reduced in proportion when retention comes off. The Amount payable is what your client's remittance should match, and what their client statement counts as owed.

Invoice totals showing the deduction withheld by the client and the amount payable

The other direction

This article is about a deduction your client keeps back from you. When you withhold a deduction from a subcontractor's bill, that is set on the supplier and reported under Bills › Deductions — see What was withheld from subcontractors.