Self employed and CIS

[AH&B]

I am a self employed plumber, if I want to hire a self emplyee labourer would I need to use CIS?

or could he invoice me and I pay him and he sort his accounts at end of year?

 

[mfgs]

You need to stop the tax at source and do a monthly CIS return.

 

[AWheating]

ideally pay him/her via CIS if its regular work.

 

[AH&B]

Why cannot he invoice me and I pay him?

What i understood CSI to be full installations in new builds? Any alteration or additions is exempt.

 

[mfgs]

Why cannot he invoice me and I pay him?

What i understood CSI to be full installations in new builds? Any alteration or additions is exempt.

My understanding of it is that as you work in the construction industry and you will be the contractor, he will then be a subcontractor and that will qualify under the CIS scheme to make you have to deduct tax at source.

 

[AH&B]

Ok, thanks.

Does it make a difference I don't work on site, I work for private customer homes.

 

[mfgs]

Ok, thanks.

Does it make a difference I don't work on site, I work for private customer homes.

No, that doesn't make a difference. You still carry out work covered under the CIS scheme and are hiring in a subcontractor. That is what my understanding is anyway, I could be proved wrong.

 

[AH&B]

Ok thanks for help.

 

[Chalked]

Don't be tempted to pay him any other way than CIS. Somone I know has been investigated and has had a hefty bill for the subcontractors national insurance.

 

[lame plumber]

hmrc used to go after the employer for unpaid tax/nics rather than the employees, being that the employer had records to offset the employee costs against tax, so you actually made the taxmans life easier!!!!!!!!!!!

 

[jim fennessey]

as far as i am aware, if you are cis,and declare you are self employed you must prove to the tax authorities,that you do work for other people wether private commercial or what ever if you do work as a suby for any company say for weeks at a time the tax authorities deem you to be not self employed and you should really be taken on the books by the contractor,the tax authorities now chase contractors abusing cis guys to save on national insurance and employee costs,and you could actually claim holiday pay from contractor depending on the amount of time you have been so called self employed, rant over .

 

[jim fennessey]

i also know one guy who took his boss to a tribunal,the company went bust and he had been doing cis for a year he claimed for holiday pay and some other monies , the full time employees got redundancy paid by government and as far as the tribunal went he was classed as an employee not self employed and got a good few quid. the fact that he had no control over costing invoicing and profit as set out by the revenue he won the case

 

[Jimbob]

Yes you need to be cis registered contractor unless you thinking annual payments will be under £1000, in which case you have to apply for an exception.

I think it's utter crap, it's so inconvenient which shouldn't be the case with subbies, you may aswell employ them. Any other industry doesn't have to do this, just construction. The worst bit is that when I do work for contractors, they take 20%, then when I pay my subbys, I have to pay 20%, which means I have to make at least 20% on the guys or I'm out of pocket, which isn't always possible.

 

[mfgs]

Yes you need to be cis registered contractor unless you thinking annual payments will be under £1000, in which case you have to apply for an exception.

I think it's utter crap, it's so inconvenient which shouldn't be the case with subbies, you may aswell employ them. Any other industry doesn't have to do this, just construction. The worst bit is that when I do work for contractors, they take 20%, then when I pay my subbys, I have to pay 20%, which means I have to make at least 20% on the guys or I'm out of pocket, which isn't always possible.

Its annoying but you will only end up paying the tax at the end of the year anyway. When I work for contractors I don't mind being taxed at source, its all then on account for when April comes around and if you have been paying out wages etc then you may just be due a rebate.

 

[Rickster123]

What ever happened to the little brown envelope of cash on a Friday? Ahh good days.

 

[turnpin]

What ever happened to the little brown envelope of cash on a Friday? Ahh good days.

I remember it well ...sigh...lol regards Turnpin:smile5:

 

[Jimbob]

Its annoying but you will only end up paying the tax at the end of the year anyway. When I work for contractors I don't mind being taxed at source, its all then on account for when April comes around and if you have been paying out wages etc then you may just be due a rebate.

I have no issue with personally being taxed at source. But the issue come for me when Iv got a few subbies. For example, If i get paid 200/per person. I would recieve £160 from a contractor, and £40 would go into my hmrc 'account'. Then if I pay them 200, I have to pay their cis of £40, and pay them £160, therefore being £40 out of pocket until the end of year. So if I have 3 guys, plus myself, I bill for 800, I get payed £640. I then pay them 160 each and 40 each to HMRC. Total payed out £600, leaving me with £40 for the day, until I can claim back the 160 that has been payed to the Hmrc. Obviously I try to make at least 20% on each, but it's not always possible when sometimes the price is tight etc