Fitting kitchens and bathrooms falls inside the Construction Industry Scheme where the work forms part of the construction, alteration, extension or repair of a building. HMRC lists fitted kitchens, fitted bathrooms and cupboards by name.
Supplying the units and leaving the customer to fit them is a different matter. That is a supply of materials and it sits outside the scheme entirely.
Supply-only and supply-and-fit are not the same job
The distinction decides your CIS position, and plenty of firms run both models without separating them in the books.
Sell a kitchen off a showroom floor and deliver it, and you have made a supply of goods. No construction operation, nothing in scope. Send two fitters in for a week to strip out the old one and install the new one, and the fitting element is a construction operation.
Where you do both on the same job, the treatment follows how the work is contracted rather than how you lay the invoice out afterwards. A single contract covering supply and installation can pull the whole payment into the scheme. And when a deduction is made, it comes off the labour figure after materials are taken out, so the material content has to be identified on the invoice. “Supply and fit, £14,500” with nothing underneath it invites a contractor to deduct 20% from the units as well as the labour.
Most of your customers are end users, so VAT works normally
The domestic reverse charge catches construction services within CIS between VAT-registered businesses. Your homeowner customers are end users. They are not VAT registered and they are not passing the work on, so the reverse charge does not apply and you charge VAT in the ordinary way.
That covers the bulk of the work for most kitchen and bathroom firms. The moment you take a contract from a developer or a main contractor, you are in a different position and the reverse charge may well apply. You would then invoice with no VAT and a statement that the customer accounts for it.
Firms that run mostly domestic work and take the occasional trade contract are the ones that get this wrong, because the trade job goes out on the same invoice template as everything else. Two customer types, two VAT treatments, and it needs setting up in your system rather than remembered on the day.
Where the margin on a fit actually goes
Customer deposits. A £6,000 deposit taken in February for a fit in April is not February’s income. It is money you owe the customer work against, and it belongs on the balance sheet until you have done that work. Spend it as though it were profit and you are funding this month’s wages out of next month’s kitchen. It also distorts your VAT position, because a deposit normally creates a tax point when it is received.
Materials bought per job. Kitchen and bathroom work is heavy on made-to-order materials, ordered against a specific customer and useless to anyone else if the job changes. Unless purchase orders are coded to the job from the day they are raised, your material cost by contract is a guess, and so is your margin.
Snagging. The second and third visits back, the replacement door that arrived damaged, the handle that does not line up, the silicone that needs redoing. None of it is invoiced and all of it is paid labour. On a firm turning over £1 million, a few days of unbilled remedial work a month is a serious number that never appears anywhere in the accounts as its own line.
What we do
CIS applied correctly across supply-only and supply-and-fit work, with the contracting set up to match.
VAT handled properly across domestic and trade customers, so the reverse charge is applied where it belongs and nowhere else.
Deposits and payments on account posted so your monthly figures show earned revenue rather than cash in the bank.
Job costing that carries materials, fitting labour, delivery and return visits against the contract they belong to.
Year end accounts, corporation tax, VAT returns, payroll and self assessment underneath all of it.
Who we work with
UK kitchen and bathroom installation limited companies turning over between £500,000 and £5 million, anywhere in the country.
Common questions
Do kitchen and bathroom fitters need to register for CIS?
If you are fitting as part of construction, alteration, extension or repair work, yes. If you only supply units without installing them, that is a supply of materials and outside the scheme.
Does the VAT reverse charge apply to my domestic work?
No. Homeowners are end users, so you charge VAT as normal.
What about work for a developer or main contractor?
That is a different position. Where the customer is VAT registered, CIS registered and not an end user, the reverse charge is likely to apply.
How should I treat a customer deposit?
As a liability until the work is done. It also usually creates a VAT tax point when you receive it, which is a separate point from when it counts as income.
Should materials be shown separately on my invoices?
Yes. A CIS deduction applies to the labour element after materials are taken off, so a lump sum with no breakdown costs you cash you then have to wait to recover.
Book a call. Bring last month’s sales invoices and we will tell you which of them were handled right for CIS and VAT and which were not.
Common questions
Does CIS apply to kitchen and bathroom fitters?
Fitting kitchens and bathrooms falls inside the Construction Industry Scheme where the work forms part of the construction, alteration, extension or repair of a building. HMRC lists fitted kitchens, fitted bathrooms and cupboards by name. Supplying the units and leaving the customer to fit them is a different matter. That is a supply of materials and it sits outside the scheme entirely.
Does the VAT domestic reverse charge apply to kitchen and bathroom fitters?
Usually yes. The domestic reverse charge follows CIS scope. Where you supply kitchen and bathroom fitters work that falls inside CIS to a customer who is VAT registered, registered under CIS and is not an end user, you do not charge VAT on the invoice. Your customer accounts for it instead. Supplies to homeowners and to end users stay outside it, and you charge VAT the normal way.