Cis

[uksparks]

Check the CIS manual CIS340.
Look at Appendix A15 A23, A39 & A40.
Not all work done by electricians comes under CIS.

Thanks, I'll take a look into it.

 

[R G]

You should have gone through this before you started working for the guy, basically he is the contractor and you are the sub contractor , If you supplied materials or had expenses then these could be taken into account before tax deductions , make sure you gat a statement from him stating the deductions at the end of the month, or as you go along , this is then retained until the end of your tax year ..

 

[uksparks]

The joke of it is, I only did 1 day for one and three days for another.

i am sure you can see it from my point of view, I send him an invoice from my business, his business should pay it, then if my business wishes to pay its employees then it will pay the tax at that time.

ive just looked at that document thanks.

 

[uksparks]

You should have gone through this before you started working for the guy, basically he is the contractor and you are the sub contractor , If you supplied materials or had expenses then these could be taken into account before tax deductions , make sure you gat a statement from him stating the deductions at the end of the month, or as you go along , this is then retained until the end of your tax year ..

i would have if I knew anything about it.

 

[Leesparkykent]

So if I invoice someone I subbed to, do I show the full amount or one 20% less?

you put the full amount then show the cost of material used on the job your invoicing for and subtract this and put this on the invoice. then minus 20% tax on this figure you've subtracted your costs, leaving you with what you will get paid.

 

[uksparks]

I'll just put my rate up to a stupid figure so I get the amount that I want else it's not worth it as I can charge my time out at £200 a day all day long so to sub out to someone for £150 then lose 20% off that, it's hardly worth while.

 

[R G]

Bear in mind you would also have to do the same if you subbed out somme of your work to anybody else , you would have to be the tax collector and do the same , these are the rules we have all had to live by for many years ....

 

[Deleted member 26818]

The CIS scheme has been about for some time.
Basically HMRC was ****ed off that tradesmen would do work and then not declare it for tax.
So they decided to deduct 20% at source just the same as would happen if you were an employee.
when you or your company files it's tax return at the end of the year, you just list the Tax already paid to offset any liability.
If your liability is zero, then you should receive a rebate on the tax paid.

 

[Leesparkykent]

i dont understand really. you sub to some one and they stop the tax for you. you do a job for a customer as a contractor not as a subbie you get paid full amount but still should be putting the tax on the profit to one side for when you or your company have to pay your tax bill. so either way you havent lost any more money in tax.

 

[uksparks]

i dont understand really. you sub to some one and they stop the tax for you. you do a job for a customer as a contractor not as a subbie you get paid full amount but still should be putting the tax on the profit to one side for when you or your company have to pay your tax bill. so either way you havent lost any more money in tax.

It really depends how you want to run your company and how much money you have in your company to carry forward each year that is classed as directors capital input that you can then take out tax free etc.

I don't want to go into the finer details of my business, but at least I am now aware of the CIS issue.

 

[R G]

I subbed to a DNO for many years and always had 20% deducted , at the end of the year you give all the deductions in and its then taken into account , if you're paying yourself below your tax threshold then this money comes back to you as a rebate , because you're a Ltd company same as I am , you still pay your corporation tax as usual , I considered it as money set aside which I got back , about 4 months after your year end , and also a little help towards your corporation tax , so you have not lost money ..

 

[Deleted member 26818]

If you have registered you Ltd Company for CIS, you will now need to complete a form each month listing everyone that you employ, even if you don't actually employ anyone that month.
If you employ yourself, then you will have to list your self, and you will also as an individual sign up for CIS, so as your LTD company can then verify that you are registered for CIS.
Might be an idea to de-register your LTD company as soon as before you start getting into trouble.
A late return attracts a £100 fine each month it is not submitted.

 

[Leesparkykent]

or go see your accountant asap

 

[uksparks]

It's ok, I've registered as a sub contractor only, not a contractor as I'm not interested in people working for me, too much hassle, so no need to do the monthly returns.

 

[Deleted member 26818]

You registered your self or your Ltd company?

 

[uksparks]

I registered the limited company as a sub contractor not myself, it took about 10 phone calls to HMRC through their stupid phone systems to sort it out.

 

[D Skelton]

What's your annual profit before material costs? If it's over £35k (it was set at around this figure when I registered my company) then you should be eligible to apply for gross status. Ergo sum... No 20% deduction.

Makes life a lot easier.

I once had a couple of subbies whinging at me for exactly the same reason you are. They tried increasing their price to cover the 'loss'. I paid them their original invoice minus the 20% on labour and told them "it's tax you would have paid anyway, you're just paying it now instead of at the end of the year. It's the law, and if you don't like it, take it up with HMRC."

I wouldn't worry about it, come the end of the year your corporation tax bill will be £90 lower.

 

[uksparks]

Well I'm going to look at that option for the gross payment status, I'll have to look at the figures.

i guess it's all a learning curve, it's a lot easier just working for yourself on your own in your own little world without anyone else.

 

[D Skelton]

Only two things are certain in this life; death and taxes. CIS just makes the latter even more certain for construction industry workers.

It's absolute boll*cks but it is what it is.

 

[R G]

Its even worse for those who are not Ltd and do work through agencies with the NI contributions as well , and the umbrella company as well , consider yourself fortunate its just 20% tax deductions ..