What was withheld from subcontractors

Under a labour-based withholding scheme — CIS in the UK, RCT in Ireland and similar schemes elsewhere — you keep back part of what you pay a subcontractor and hand it to the tax authority yourself. Each period you then account for what you paid them and what you kept back.

Maliru works out the deduction on each bill and lists what was withheld over any period. Maliru files nothing and sends these figures nowhere. It gives you the figures to work from; making the return is yours.

This needs Manage bills & expenses and the Subcontractor deductions feature switched on for the workspace. Subcontractor deductions are on the Crew plan and above. It is on unless someone turned it off under Global settings › Modules, in Commercial & billing.

1. The scheme

The deduction uses the first scheme listed under Commercial › Invoices › Document settings › Deductions — its name, whether it is taken on the labour element or the whole net amount, and its rates. If your country's suggestions included one, it is already there. See Deductions your client withholds for how a scheme is set up.

2. The subcontractor's standing

Open the supplier on Bills › Suppliers and fill in Subcontractor deduction. It is "Only used when this supplier is a subcontractor whose payments are withheld at source and paid to the revenue authority." Leave it at Not registered for a merchant, a hire firm or a utility.

• The standing: Not registered, Gross — nothing withheld, Standard rate or Higher rate. Standard rate takes the scheme's first rate, higher rate its second.
• Their tax reference, a Verification reference and Verified on — the date you checked their standing.

3. The deduction on a bill

On a new bill for that supplier, the deduction appears under the totals:

• Net, the tax line and Total;
• Less the scheme's name, at the supplier's rate;
• Payable — what you actually pay them.

On a labour-based scheme the deduction is "Taken on the labour in this bill, not on materials or plant." Tell Maliru how much is labour:

• With no lines, enter the Labour amount. It starts at the whole net — lower it by the materials on the invoice.
• With lines, each line has a Labour % column, and the labour amount adds up the lines' shares. A line that says nothing counts as all labour.

On a scheme taken on the whole net, the labour amount is still recorded for the return, but the deduction comes off the net.

4. Reading it back: the Deductions tab

Commercial › Bills › Deductions lists what was withheld from each subcontractor over a Period. Pick a month, or choose Custom dates…, set From and To and choose Show.

The dates the figures cover are printed above them, because two things decide them:

• The payment date, not the bill date. "A bill raised in one month and paid in the next counts in the month it was paid." So these figures will not match a list of bills read by their own dates.
• What a month means for your scheme. A scheme that runs on tax months counts the 6th of one month to the 5th of the next — the UK suggestion does; others count calendar months.

Each row shows the Subcontractor, their Tax reference and Verification (Not recorded where the supplier record has none — fix that before you account for the period), then Gross, Materials, Labour and Deducted. Totals are given per currency. Download CSV takes the lot away.

Only suppliers marked as subcontractors, paid within the window, are counted. A quiet month is normal.

If your workspace also runs pay through Maliru, Pay › Withholding return puts these bills beside the contractors paid through pay runs, so both halves of a return are in one place — see Withholding returns.