CIS Scheme I raise this again !

[Evans Electric]

I revisit this as we covered it before ...(everyone shouts at me )  

I raise it because I was talking to people  who were declaring  ALL  their labour content to a main contractor  WHEN they were employing a subbie  .  I maintained this to be wrong .   

The premise is this :-

Lets say Andy does a job in Brum  , he pulls me in to help for a week .   

He has to submit a CIS form to a his  Main Contractor  to get paid. 

In my opinion Andy should only declare HIS labour  plus mats.  to the MC   who will deduct tax under the system. 

The MC has a contract with Andy  but he doesn't have one with me  , he doesn't know who I am  ...  how can he deduct my tax and pay it to HMRC  when  he  has no record of me . 

Andy becomes  an "Employer "  for the week & its up to him to deduct my tax and forward it to HMRC  .

What guys were doing  was declaring ALL earnings  ....     paying the tax  ....then paying wages from taxed income  to subby  who was then   paying again .  

 

[Risteard]

They're not paying again. The tax paid is offset against the tax owed. You have it wrong. 

 

[ProDave]

Don't over think it and don't try and be somebody elses tax consultant.

Just deal with your own affairs.  If YOU do a CIS job, tax is deducted from your pay. There is a box on the tax return do declare how much CIS tax you have paid.  That is simply logged as tax already paid in that year which reduces how much you then have to pay.  So there is no double payment, you just in effect "pay" the CIS tax immediately (like PAYE) and all other tax gets paid at the end of the year.