Accountants for Flooring Contractors

Carpet fitting is excluded from the Construction Industry Scheme. Vinyl, LVT, resin and timber are not.

Flooring has the sharpest CIS split of any trade we work with. HMRC’s guidance takes carpet fitting out of the scheme, and it takes out carpet only. Nothing else laid on a floor inherits that exclusion.

Everything else is tested on the ordinary rules, which means it falls inside the scheme when the work is part of a wider construction project. Lay LVT through a new build or a commercial fit-out and you are a subcontractor with 20% coming off.

So one job is outside the scheme and the next one is inside it, depending on what came off the van. The same fitters, the same customer, a different roll.

What the exclusion does and does not do

It applies to carpet, and HMRC’s position is that it holds even where carpet is fitted as part of a mixed contract. Carpeting the bedrooms of a new housing plot does not become a construction operation because the rest of the site is one.

What it does not do is travel. Carpet tiles, vinyl, safety flooring, LVT, engineered timber, resin and rubber are all outside the exclusion, whatever the customer calls them on the order.

So your scheme status is decided product by product, and the split needs to be visible in your own system rather than worked out from memory when a contractor asks.

Invoicing a mixed job

This is where the money is won or lost.

If a single invoice reads “supply and fit floor coverings, £34,000”, a main contractor will apply CIS to the labour across all of it, including the carpet. You will get the overdeduction back eventually, through your corporation tax return or a repayment claim, but you have funded their convenience for a year.

Invoice a mixed job in separate lines. Carpet supply and fit shown on its own, with the other coverings shown separately, and materials split from labour on both. Then check the deduction statement that comes back and match it to what you invoiced, because contractor systems default to applying the deduction across the whole labour figure.

Subfloor preparation is its own construction operation

Almost every hard flooring job starts with the floor underneath it, and that work is inside the scheme regardless of what goes on top.

Latex and levelling compound, screeding, damp proof membranes, moisture suppression, plywood overlay and grinding or lifting an old covering are all construction operations. Do that preparation before laying carpet and the preparation is still within CIS even though the carpet fitting is not.

That is the sequence flooring firms most often get wrong. The excluded product is at the end of the job and the in-scope work is at the start of it, so both belong on the same invoice, priced and shown separately.

Materials, and holding stock against jobs

Flooring carries expensive stock. Rolls cut for a job, boxes of LVT ordered to a batch, adhesive with a shelf life, and offcuts that will never be used on anything else.

CIS is calculated on the labour element, so material shown separately is excluded from the deduction. That matters more here than in most trades, because the material can be over half the invoice on a supply and fit contract.

Stock also has to be counted properly at year end. Rolls sitting in the warehouse for a job starting in April are an asset of the year just ended, and treating them as a cost moves your profit and your corporation tax.

Wastage belongs on the job that caused it. A room cut badly, the wrong batch ordered, a client changing colour after the roll is cut, all real costs that get lost in overheads unless somebody puts them against a contract.

Domestic work against contract work

Fitting direct for a homeowner puts you outside the reverse charge. They are the end user, so you charge VAT in the normal way and pay it over.

Working down the chain from a main contractor on a project is where the reverse charge applies, on the elements within CIS. Carpet fitting sits outside CIS, so the reverse charge does not apply to it either, while the vinyl and the subfloor prep on the same site do fall in. That is two VAT treatments running through one contract, which is why flooring invoices need building line by line.

What we do

Map your work against CIS product by product, so you know which contracts are in and which are out before you invoice them.

Invoicing set up for mixed jobs, with carpet, other coverings, preparation and materials separated, and the deduction statements coming back checked against them.

VAT handled across domestic and contract work, with the reverse charge applied only where it belongs.

Job costing including materials consumed, wastage, offcuts and return visits, plus year end stock treated properly.

Underneath it, the usual. Everything else you would expect as well. Year end accounts, corporation tax, VAT, payroll and self assessment.

Who we work with

UK flooring and floor covering limited companies turning over between £500,000 and £5 million, anywhere in the UK.

Common questions

Is carpet fitting inside CIS?
No. HMRC’s guidance excludes it, and that holds even where the carpet is fitted as part of a larger contract.

Does that exclusion cover vinyl and LVT?
No. It applies to carpet and no other floor covering. Everything else is judged on the ordinary rules.

So when is LVT inside the scheme?
When it forms part of a wider construction project, which covers most new build, refurbishment, fit-out and major repair work.

How should I invoice a job that is part carpet and part hard flooring?
On separate lines, with materials split from labour. One combined figure invites the contractor to deduct across all of it.

Is the latex and levelling work before a carpet inside CIS?
Yes. Subfloor preparation is a construction operation in its own right, whatever covering goes over it.

Book a call. Send us two recent invoices, one carpet and one mixed job, and we will tell you which deductions were wrong and what you can get back.

Book a call