something looks very dodgy there, potentially for both you and him. you might want to look into it a bit further to make sure everything is legit and there wont be any comeback on you
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It is as Prodave stated.
Either he is self employed or he is not. Like dave says, IF he does work for others too, he MIGHT be classed as self employed, if he mainly does work for you, he is employed by you whether you like it or not. YOU are the one that will get the summons for fraud. You can debate this all you like, you can have any paperwork you like, the IR rules are quite clear and have been reinforced by the courts many times.....
http://tools.hmrc.gov.uk/esi/screen/ESI/en-GB/summary?user=guest
john..
Either he is self employed or he is not. Like dave says, IF he does work for others too, he MIGHT be classed as self employed, if he mainly does work for you, he is employed by you whether you like it or not. YOU are the one that will get the summons for fraud. You can debate this all you like, you can have any paperwork you like, the IR rules are quite clear and have been reinforced by the courts many times.....
http://tools.hmrc.gov.uk/esi/screen/ESI/en-GB/summary?user=guest
john..
I'm not criticising or trying to be argumentative, but it doesn't sound fully legit.
If he is SE he needs to issue you with an invoice.
If he is employed he should get a payslip etc.
If you do not give him a payslip and he does not issue you an invoice then he is not working for you from a tax point of view. This would mean HMRC would be interested in knowing what is going on here.
I would have a proper look at the arrangements between you and this unemployed subcontractor on the books.
Essex - are you deducting TAX and NI?
Agreed.
CIS only
I know. All cool mate. He gets a CIS deduction slip so HMRC are fully aware.
If he is CIS he should be issuing you with an invoice. He is a subcontractor, you cannot be on the CIS scheme if you are employed. Whether or not he issues you an invoice does not change the fact that he is a self employed subcontractor to you.
There is obviously something amiss, one of you, or both, have got something wrong somewhere.
There is obviously something amiss, one of you, or both, have got something wrong somewhere.
You are missing my point. Whether he provides an invoice or not does not dictate what his employment status is. It is down to the relationship of the work and how us as a company control his work, whether we provide a van, tools, equipment etc... I just done this on the HMRC website and it is very good -
http://tools.hmrc.gov.uk/esi/screen/ESI/en-GB/summary?user=guest
He should be employed judging by the way I answered the questions.
You are missing my point!
https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/overview
If he is on the CIS then he must be self employed and must be a subcontractor.
If he is self employed and a subcontractor he must issue you with an invoice.
I am not debating whether he should or shouldn't be self employed or employed based on whether or not he issues you with an invoice.
https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/overview
If he is on the CIS then he must be self employed and must be a subcontractor.
If he is self employed and a subcontractor he must issue you with an invoice.
I am not debating whether he should or shouldn't be self employed or employed based on whether or not he issues you with an invoice.
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No.
You do not have to issue a formal invoice. A time sheet can be accepted as an invoice as detailed in the sub-contract. As long as both parties agree this is acceptable practice.
What is the difference between a time sheet and an invoice? A number and that is it. Use the date as a number and it is identical to an invoice. I was SE for the same company for 4 years doing exactly this. 3 years for another company. Very standard practice.
does the timesheet clearly state amount etc to be paid like an invoice would, or just the times he was working?
The HMRC has clear guidelines about what an invoice should look like and how it should be laid out, what numbering sequence should be used etc (the date is not acceptable as an invoice number). Many people do things wrong, I am continually amazed at what people do and get away with without realising it (based on what I see crop up quite often on accounting forums).
Just because you have always done something that way doesn't make it right.
That does sound sensible. The way it is at the moment is not right from several angles. The CIS was meant to be preventing this getting around PAYE by being a full time SE subcontractor thing from happening in the first place so that hasn't worked out so well in your case!
I'm a CIS subby for a builder,
They are very particular about how I invoice them, and it must be an invoice or I do not get paid,
The invoice must have their trading title and full address on it, a unique invoice number, cost of labour, cost of materials, and total, and it must be accompanied by a jobsheet detailing works done
I can't see how you can pay a subby without an invoice.
They are very particular about how I invoice them, and it must be an invoice or I do not get paid,
The invoice must have their trading title and full address on it, a unique invoice number, cost of labour, cost of materials, and total, and it must be accompanied by a jobsheet detailing works done
I can't see how you can pay a subby without an invoice.
Ultimately I could not care less about invoices and how they are presented with regards to employee terms. People should be treated right and deserve holiday pay etc. SE does not afford anyone that and it is not right. As I said earlier this is his choice. No, it was his choice...
I didn't think that you could be CIS with only one long term customer???... I thought that after a while that you had to go on the books
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Also I would think if he is on the dreaded CIS system he is SE and you would have no pension liability to him .
I was informed years ago that to be classed as SE you should be quoting jobs & taking a financial risk . Hence our subbies ( after a discussion with us) would submit a quote to ...say...install a 50mm SWA submain from A to B , mount control panel including all connections , clipping etc.
That sort of thing .
I was informed years ago that to be classed as SE you should be quoting jobs & taking a financial risk . Hence our subbies ( after a discussion with us) would submit a quote to ...say...install a 50mm SWA submain from A to B , mount control panel including all connections , clipping etc.
That sort of thing .
The HMRC has a great set of questions and when answered they tell you whether that person is SE or PAYE. They ask questions such as - if the work they carry out is completed unsatisfactory do they return at their own expense to correct it? And - can the person carrying out the work bring in additional labour if required?
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