Cis

[huntos33]

Hi guys looking for some help to save me hours on a phone to HRMC as i can't find the answer online... ok here goes and i hope its not to rambled

I do a £10,000 job for a main contractor ( labour only) he stops me £2000 under the CIS scheme simple.... now i get a little lost because my Sub contractor will bill me say £1000 to keep it simple i now have to stop his tax on already taxed income, so technically i'm paying 40% tax on the £1000.00

Is this right ? and how is this offset ?

Glen

 

[Pete999]

Can't help mate only to say hire an Accountant

 

[snowhead]

I'm not in CIS but to me you are invoicing for £1000 + £9000 and having £200 + £1800 deducted.

You've already paid your Subby's tax to your Main contractor.
The £200 you deduct from your Subby, you keep, but must have to document it somehow.

 

[Risteard]

You're not paying anything on the tax you deduct from your subby. He is paying this 20%. You only pay him 80% and hand the 20% over to HMRC so you only lose 20% once.

Of course if your turnover is high enough and you meet the other two tests then you could apply for gross payment status.

 

[Octopus]

And HMRC wonder why so many cash payments get made.

Its far too complicated IMHO

 

[bigbaddave]

For CIS the max they can deduct is 30% on labour only. If you register with HMRC you have the option of the following providing your turnover is more than 30k. Either 20% deduction on labour or no deduction however you have to speak to HMRC and agree then and register otherwise 30% will be deductible

 

[Risteard]

If you register with HMRC you have the option of the following providing your turnover is more than 30k.

That is the turnover test. There is also the business test and the compliance test.

 

[Farmelectrics]

Get an accountant