CIS Scheme

[Stanios]

Hi all,
Just recently received my self employment status, now also received a CIS letter. I sub alot for one guy who is not very good with book keeping. I absolutely do not want him deducting 20% which I shouldnt be taxed anyway since im nowhere near the taxation threshhold yet and wont be for at least a year since I spent over £15000 starting out. So far he has been paying me without deductions and I am perfectly happy to just pay my tax as I go myself.

Is this CIS thing compulsory?

Ta

 

[mfgs]

Yep anyone paying subcontractors needs to be deducting the tax and doing a monthly CIS return and paying the tax at the end of every month. You should then be issued with a tax deduction statement from the guy you subcontract to.
They aren't interested in whether you are near the threshold or not, you need to have you tax paid at source and then you will get it back at the end of the year if your tax return shows that you have paid too much.

 

[Stanios]

Thing is the guy I sub for ets regular fines from taxman for missing various deadlines. I cant imagine that if I pay the tax myself properly they can have any issues with me.

 

[mfgs]

It is his responsibility to file the CIS return and pay your tax, if he fails to do this then it is his problem and not yours. If he pays you without deducting the tax then if he gets investigated he will be liable to pay the 20%/30% on whatever he has given to you.

 

[Masood]

Thing is the guy I sub for ets regular fines from taxman for missing various deadlines. I cant imagine that if I pay the tax myself properly they can have any issues with me.

Just make sure you keep detailed records of your invoices to him, tallied against payments into your account. That way any delays or omissions are his problem not yours.

 

[Stanios]

I understand the motive behind CIS is to help self employed who cant afford an accountant or havnt got time to get their taxes in order. But surely they cant expect everyone to fall into this category. I simply cant afford to give 20% there and then and surely if google can pay less than one percent 10 years later why cant we be given similar luxury?

 

[Millsy 82]

Unfortunately that's just the way it is and has been for years. There is no changing it and if you do lose money over the year chances are you will get a lovely pay out at the end of it.

As for Google, if you want to employ a top accountant and can afford to pay them possibly hundreds of thousands of pounds then you too will be able to pay 1% tax otherwise you will be like the rest of us.

 

[Stanios]

Looks like theres no way around it then. O well Im sure the government will spend my money wisely

 

[Chalked]

Looks like theres no way around it then. O well Im sure the government will spend my money wisely

If you are not liable for tax. You wil get it back.
You should show on your invoice a dedication on labour for 20%. He should send you a statement every moth with the deductions on it. Keep these and give them to your accountant, they are like money to you.

 

[stevetheplumber]

he can only stop tax on the labour part of the bill he must issue you with a cert to say he has stopped the 20% after that its his problem if he gets behind