Fekin

All materials are classed as expenses, so you don't get taxed on them, unless you add a profit onto them, then you will be taxed on the profit of the materials.

Basically, you take your £1000 cheque, but offset the £500 as costs because you'll have a reciept for them as expenses, so the £500 for materials is deducted from your £1000 leaving you with £500 profit, then your taxed on that £500.