Payment from builders

[J.C.E]

Happy Sunday all!

In the middle of a ongoing house ren/ double extension- doing the electrics for the builder who's job it is

Just been a rolling job really- few days here and there- no real rush sort of jobby!

Anyways- asked for some money for 1st time for this job- which seemed all fine/ no problems

Didn't have a figure in mind- just wanted a nice chunk (at-least 500) and he actually suggested half the total invoice- which is more than my initial 500- so happy days!

but it was just when he mentioned 'oh my accountant advised me to start paying people via CIS'

I am paid CIS by the firm I usually do subbying for- but they are a large firm and have 100's of subbys
-is it normal for just a small 1 man band to pay a spark via CIS?? (he is a limited company)

Not particularly worried he is trying to 'do me over' - because he has bank transferred me half and suggested he will probably pay the other half in cash on completion (not that cash matters- as I am saving for a mortgage so I want to be putting everything through books anyways!)

just wondering if any of you guys have been asked to get paid by a builder and taxed at source?

 

[LankyWill]

cant diddle the tax man mate

 

[J.C.E]

Your post was pointless
read 1st then reply

 

[Octopus]

If, and I say if the builder says he is paying using cis, then make sure he confirms this.
As for the balance payment, pout it through your books and issue an invoice.

Re the mortgage goal, how long have you been se?

 

[J.C.E]

If, and I say if the builder says he is paying using cis, then make sure he confirms this.
As for the balance payment, pout it through your books and issue an invoice.

Re the mortgage goal, how long have you been se?

thanks for the more useful reply lol!

yes of course- if he insisted on paying by cis then i would ask for my receipt to prove tax was taken at source by him

but i was just wondering if this is the norm for a 1mb builder to pay a 1mb spark- why would that be better/easier for him?

and yes i have invoiced his half payment and will do the same for the other half

it seems like i have been saving forever now! I am only 23 and only turned self employed in sept 15- so won't be for a few more years yet (one to have the money and also to have a few years of books to show!)

 

[SJD]

yes of course- if he insisted on paying by cis then i would ask for my receipt to prove tax was taken at source by him but i was just wondering if this is the norm for a 1mb builder to pay a 1mb spark- why would that be better/easier for him?

It's not easier for him, in fact it means a lot more admin including him sending any withheld tax payment to HMRC, and submitting a monthly return by the monthly deadline or risk a fine. It is a more that HMRC require him to do this.

It might be too late now, but on these sort of jobs, perhaps see if you can work directly for the customer, who pays your bill directly and in full.

 

[Risteard]

The builder is legally obliged to use the CIS scheme for this work. It's not a choice on his part.

 

[J.C.E]

sorry to bump a old thread (of mine)
been paid again in this way by a different builder- invoiced them for 1000 and got bank transferred 800 and said I would receive my statement of deduction in a month.

not a problem- as I have to either pay tax now or end of year anyway.....just interested as this SE stuff is still all pretty new for me!

So do most builders pay this way (taxed at source)

I was paid CIS when I was doing subbying- but this was labour only- but these 2 jobs were labour and materials... how does this work as I have now already paid tax on this job.....do I just still put the materials receipts against my income at end of year

 

[Risteard]

So do most builders pay this way (taxed at source)

They all have to in order to comply with the law.

 

[Risteard]

I was paid CIS when I was doing subbying- but this was labour only- but these 2 jobs were labour and materials... how does this work as I have now already paid tax on this job.....do I just still put the materials receipts against my income at end of year

You shouldn't be stopped the tax on your actual materials cost - only any markup and your labour.

 

[Leesparkykent]

you should invoice the builder with a labour/material split. I have gross payment status

 

[J.C.E]

you should invoice the builder with a labour/material split. I have gross payment status

I am lost now

 

[SJD]

On your invoice, clearly separate materials and labour, with totals for both. There should only be a CIS deduction for the labour. If you did this, possibly the builder doesn't fully understand how to operate CIS either!

 

[Leesparkykent]

I am lost now

say the jobs worth a grand. material £200 and labour £800. Invoice to builder should state cost of labour and cost of materials so CIS only gets deducted from the £800 which is £160 at 20%. If you want to hide material costs then you will have to have CIS deducted from the gross payment of a grand and balance it out at the end of the year.

 

[J.C.E]

say the jobs worth a grand. material £200 and labour £800. Invoice to builder should state cost of labour and cost of materials so CIS only gets deducted from the £800 which is £160 at 20%. If you want to hide material costs then you will have to have CIS deducted from the gross payment of a grand and balance it out at the end of the year.

or after a quick google.....do what you do..

"If in the last 12 months your net turnover after deducting VAT and the cost of materials is £30,000 or more, you’re eligible to apply for gross payment status.

You can apply as soon as your net turnover reaches £30,000, you don't have to wait until you've got 12 months of accounts.'

So I can just invoice a total rather than show the split and pay my taxes myself at end of year


got it?

 

[Leesparkykent]

yeah but you have to meet certain criteria. Are you limited or sole trader? Obtaining Gross CIS Payment Status - http://www.whitingandpartners.co.uk/News/CIS-Obtaining-gross-payment-status