IS THE TAXMAN AFTER YOU???

[steptoe]

if I do a job and have someone do some work for me do I have to do a CIS?

now tell me what part of that you dont understand?

as opposed to the original question?

if I have someone do a job for me do I have to go down the CIS route?

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All depends who's paying his wages steps if you are paying him you are responsible for his tax. If who you are contracting too is paying his wages then they will take his tax.

I dont quite follow that batty,

after all, if you do a job for a private householder, they are not responsible for your tax are they?

this is the point Im trying to clear up,

is it really worth my while having a bit of help the odd day here and there or not.

if I have to do CIS then clearly not.

 

[batty]

That is the problem Steps if you are paying his wages you are responsible for his tax unless customer pays him direct.

 

[Sharpend]

The CIS is only for the construction industry. Therfore if you are doing private work and you use extra labour you would be answerable to the tax man (if he found out that you used extra labour) for your casual labour expenses. If in the other hand you are talking about working within the construction industry and used extra labour on a regular basis then you would be responsible to register as a contractor and therefore be accountable for tax payments. If you are subbing the work for yourself then those that you sub too are responsible for paying your 20% tax rate. It does get slightly more complicated if you are registered as a contractor for tax purposes under CIS then you start subbing work to extra labour.

 

[steptoe]

The CIS is only for the construction industry. Therfore if you are doing private work and you use extra labour you would be answerable to the tax man (if he found out that you used extra labour) for your casual labour expenses. If in the other hand you are talking about working within the construction industry and used extra labour on a regular basis then you would be responsible to register as a contractor and therefore be accountable for tax payments. If you are subbing the work for yourself then those that you sub too are responsible for paying your 20% tax rate. It does get slightly more complicated if you are registered as a contractor for tax purposes under CIS then you start subbing work to extra labour.

FFS sharpie

thats complicated enough for me,

I'll read it tomorrow when the wife is sober and get her to understand it for me.

 

[Sharpend]

FFS sharpiethats complicated enough for me,

I'll read it tomorrow when the wife is sober and get her to understand it for me.

Look steps it is tax when has that ever been simple. Even the chancellor is allowed a drink when he starts telling us about the changes he is making to it so what chance do we stand.

 

[Evans Electric]

Steps, this is how it works.

(1) We are classed as construction workers by HMRC.

(2) Therefore we have to operate within the pathetically stupid CIS scheme.

(3) This does not apply when doing Domestic, Industrial and Commercial work direct for the customer, on your own.

(4) This does apply if you work for a builder or another Spark, they would have to deduct 20% tax under the scheme.You will be a Sub-Contractor.

(5) The same applies if you get someone in to help you, you become a Contractor and should be deducting tax from him.

(6) However you are allowed to pay gross if it is one off or occasional arrangement. ( I have this in writing somewhere)

(7) I would go with the latter if I were you , there are strict penalties attached to late payment of CIS .

(8) You need to see my PM .

 

[ProDave]

I'm signed up to this CIS scheme but only as a subcontractor. I NEVER want to employ anyone and hence become a contractor.

Question:

I'm doing a new build, and the builder was rather disappointed when I told him I was registered under the CIS scheme. He said "don't you have an exemption certificate ?"

So what's this exemption certificate then? is he saying I don't need to be CIS registered?

 

[Evans Electric]

Dave , the only exemption certificate I can think of is when your turnover is high enough to exempt you . I don't know the limit but if I remember correctly the likes of us One Man Bands don't get near it .

So the likes of N.G. Bailey Ltd wouldn't be bothered with it.

Your guy just didn't want the hassle which is daft really, surely all his other subbies aren't exempt , his brickie , plasterer, plumber all exempt, nah !

 

[Kevey]

HMRC proberbly will not not have the rescources. :yawn

 

[Sharpend]

I have done new build for a private builder and did not deduct the CIS tax man was ok with that as I explained this builder only does half dozen builds a year.

 

[Evans Electric]

Thats worth knowing , Sharpy .

 

[Sharpend]

Got home this week to find my invitation had arrived. Opened it whilst cleaning the van windows and have to say its ruddy marvelous for drying the windows no streaks. I knew the tax man would come good in the end.

 

[ProDave]

Dave , the only exemption certificate I can think of is when your turnover is high enough to exempt you . I don't know the limit but if I remember correctly the likes of us One Man Bands don't get near it . So the likes of N.G. Bailey Ltd wouldn't be bothered with it.

Your guy just didn't want the hassle which is daft really, surely all his other subbies aren't exempt , his brickie , plasterer, plumber all exempt, nah !

That's a strange situation. You would have thought an exemption would have applied to guys with a low turnover, not a high one. There's nowt so strange as the UK tax system.

This house I'm doing at the moment is timber framed and the builder employs 2 other chippies on the books. But I know he's employing me, a plumber and a brickie as a subcontractor, and I'm willing to bet the roof tiler was a subbie as well, so I don't know why he acted all disappointed when I told him I was CIS.

We'll see on Monday when I give him my first invoice.

 

[batty]

Builders are the worst for getting out of paying tax how many do you know that are not even VAT registered.

 

[Evans Electric]

Dave , if he wants to pay you gross just plead ignorance and take it ,put it through your books ,he,s happy, you're happy, the taxman,s happy, even I'm happy.

I was paid CIS on the Great Warwickshire Farmhouse Job by the builder. I realised that under CIS , my expenses are taxed which seemed naff to me .

All I did was charge the builder for a gallon a day ( 50 mile round trip)Anyway invoice No.1 included for

 

[ProDave]

I think he did your deductions wrong.

I thought CIS tax was only deductable from the labour element of your invoice. If you also invoice for materials and travel, those are not supposed to have CIS tax deducted.

Yes if he pays me gross, I won't complain.

One builder I work for frequently now, did not deduct CIS from my first job, he claimed he only had to when it became regular.

 

[Evans Electric]

I think he,s right there.

My first invoice showed the expenses seperate, as I thought they were not taxed .

I checked the expenses thing but in the CIS handbook it clearly says expenses are to be included in the taxable amount . The builder considered them as earnings as HMRC do. I bloody don't .

And as I've posted many times before, if you employ another spark to help you , I only set out my own earnings to a builder for CIS tax .

Two reasons for this .

(1) If you put the whole labour figure in you are then trying to pay your mate from taxed income .

(2) When you deduct his 20% thats the 2nd time its been taxed .

(3) The only contract that exists is the one between you and the builder ....how can he stop tax from your mates part of the money , he doesn't have a V number for him for a start because you will be stopping his tax when you pay him .

For some reason no one seems to agree with me on this, except a painter . He said in discussion that he gives the builder the full labour figure which he deducts tax from and pays him whats left.

The painter then pays his two blokes and deducts tax fom it.

I'm saying to him that the builder has already stopped that tax and you're doing again ...and you never had the full amount in your bank to pay them from anyway 'cos the builder kept 20% of it so you were 20% down on the deal .

Then someone said " Yeah but we claim it back at the end of the year " Well I never met anyone who could actually describe how they did that TBH

Example :

A builder asks me to do a job , I tell him

 

[Sharpend]

I sub to another electrical firm and the work is on price, however they also pay me a mileage rate as well. When I invoice them I put a total invoice figure (labour only) less 20% CIS giving a Net figure, this is a sub total. I then add on the calculated mileage giving a payable total.

Never had an accountant or tax man question this, been doing this for years.

 

[Andy™]

i would put fuel down to materials

IIRC, to be paid 'gross', you have to have a stuipdly high turnover (i.e almost impossible for a 1 man band).

fortunately, i rarely do any work as a subcontractor. almost all of my work is directly for the customer

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Example :

A builder asks me to do a job , I tell him

 

[philbas]

even I'm happy.

The other six dwarves are NOT Happy