Self employed through C.I.S? Any benefits?

[littlespark]

As some of you guys and gals might know, I have been self employed for a couple of years now. I send my books to my accountant who files it with HMRC.

I've been approached by a company who will be working on a local hotel in the near future and I was wondering if it was going to be worth my while.
I would be sub-contracted by the main contractor and be part of a team of electricians.
This main contractor would pay me through the CIS scheme.

He has quoted rates of pay as £18 an hour for up to 37.5 hours a week and £24 per hour for anything over that. Whatever I earn would have 20% taken off as tax and sent to HMRC.

I usually charge £30 an hour, but I have to take my overheads out of that, plus there's time during the week when I'm not being productive and cannot charge to any customer.

This hotel job would be 5 to 6 months initially on the existing building rewire, then maybe another 6 months on a swimming pool extension and more bedrooms. So regular hours, regular income.

Has anyone worked through a CIS scheme? Is it beneficial? and is it possible to claim expenses (eg mileage) on top of the £18 as it will be a 40 minute drive each way every day.

If I take it, It will mean I'll have to do my normal little jobs on evenings and weekends.

Thoughts.... good or bad?

 

[telectrix]

basically, under CIS you pay 20% deducted from your wages. make sure the employer gives you a tax form ( forget the form no. might be P60).showing the cis deductions when the cis job ends. when you come to do your tax return, you will have that form stating what deductions have been made under CIS. then you discount the tax paid against your tax bill. remember to keep all receipts for fuel etc. and enter them i =n yor tax return with all other expenses.

 

[littlespark]

I already give my fuel receipts with my tax return as it is.

It just sounds not a good deal for me... £30 down to £18.... that’s why I wondered if I would get mileage or other expenses. Ie would they pay for me to buy tools or PPE?

 

[123]

Unless you have agreed with the company to pay you mileage and/or tool allowance etc all you can do is claim the tax relief on your expenses.

 

[J.C.E]

it makes no difference to you in the end- cis is just you being taxed at source rather than all a once at end of the tax year. Most contractors are meant to pay other contractors this way- but not all actually do...

 

[littlespark]

I suppose the question should be, is £18 an hour realistic for this sort of work or are they taking the pee?

 

[J.C.E]

135 a day before tax- pretty low especially if London!

But on the flip side you say its guarenteed work for half a year so depends how much you need it

 

[Deleted member 26818]

£18 per hour is not good.
£20 per hour is better and about average at the moment.
Top end is about £22/23 per hour, £25, if you’re lucky.

Yes you still claim mileage, subsistence, etc.
Make sure you have a UTR number.
If you haven’t, get one quick, otherwise you get taxed at 30%.

 

[ferg]

The down side is that you won't be able to grow your business and will inevitably lose customers.
When the job ends you may find you are starting again.

 

[Nigel]

£18 per hour is not good.
£20 per hour is better and about average at the moment.
Top end is about £22/23 per hour, £25, if you’re lucky.

Yes you still claim mileage, subsistence, etc.
Make sure you have a UTR number.
If you haven’t, get one quick, otherwise you get taxed at 30%.

He will already have a UTRN being self-employed but what is important is the Op must call HMRC and register his UTRN for CIS. This will then mean he is taxed 20% instead of 30% as you say.

 

[kropaske]

I think key here is to check what have you been earning on average in your previous months and compare to what you will be earning with new contractor. Rate he pays is not great but this may be opportunity to build new relationships and gain new customer for future. After few months if you prove good you my be able to negotiate new rate.
In the meantime you may still be able to do little bit private work which will add to the pot.
You will be able to claim expenses back as before and will have to pay NI as before the only different will be tax deducted at source as mention before for which you will get voucher within 2 weeks of being paid.
Also may be worth discussing with your accountant going ltd if you expect income of +30k

 

[littlespark]

Some good advice here, cheers.

I suppose the other question might be... Do I actually want the job?
Its in an old country house hotel, near a river. Do I really want to be crawling through attics and basements with cobwebs, rats and God knows what else at my age? 44. No spring chicken

Good point about going LTD.... I'll speak to my accountant about that.

And @ferg , I know it could harm my existing customer relations... but isn't that the way with a lot of SE one-man-band tradesmen? You get a big job, you can't do the little stuff?

 

[kropaske]

Do I really want to be crawling through attics and basements with cobwebs, rats and God knows what else

Sounds like fun to me

You can always leave after a weak if you don't like

 

[Nigel]

Sounds like fun to me

You can always leave after a weak if you don't like

So weak you are a fortnight.

 

[littlespark]

It’s not a case of being weak, it’s a case of being older and fatter than I used to be.
I can’t physically fit through some old attic hatches now.

 

[KEV 1 N]

I've been approached by a company who will be working on a local hotel in the near future

Wasn’t Interserve was it?

 

[ferg]

@littlespark It is always a bit of a balancing act but you can prioritise if you are in complete control of your workload.

Arriving an hour late at a big job or leaving an hour early to keep another good customer happy is no big deal but it's a sacking offence if working for someone else.

I hear you on the older and fatter thing I had to shift some weight for the same reason. I've a bit more to go yet but it's amazing how much easier work is when under floors and in attics. I'll always be more Fat Barstard than Kate Moss though.

 

[littlespark]

Wasn’t Interserve was it?

Well, I got word of the job through a Facebook suggestion... I only had a couple of names to go by, but I think now it’s a company called EH20.
Edinburgh based by the looks of it.