CIS Tax Paying it twice?

[Evans Electric]

I ran this post last year and thought it deserved another airing for any newbies or oldies who missed it.

You are working for a builder and a mate is helping you . Its your job and you will be paying your mate. The builder will operate the CIS scheme .

Many blokes (other trades too) declare their total labour figure to the builder for him to deduct the 20%.

This is not the best way as you then have to pay your mate out of taxed income and when you stop 20% from his wages too , he has paid twice!!

Nobody I have spoken to ever seems to get this back.

The contract is between you and the builder so only your labour figure is declared to him to comply with the scheme. You then pay your mate from untaxed income and deduct 20% tax. THERE IS NO CONTRACT BETWEEN YOUR MATE AND THE BUILDER so he should not be deducting tax from his share of the labour figure, that is up to you to deal with .

Not everyone agrees with this .

 

[Jono Pashley]

Gordon Brown agrees with double taxing, personally i think its carp and should be rethought.

 

[Zeespark]

Gordon will condone any practice that earns him

 

[Lee321]

I never do that. just pay the mate the net and on your monthly returns declare zero. its legit i checked it with hmrc. its zero because the tax has already been paid.

imagine if you had 12 sparks and mates either you'd brunt the double tax or they would and they more than likely won't stand for it or even worse work but take the ****.

its an unworkable method.

 

[spinlondon]

Yes, you should pay the mate his nett amount, state on your monthly statement that you have deducted his tax, and then offset it against the tax deducted by the builder.

 

[Lee321]

Yes, you should pay the mate his nett amount, state on your monthly statement that you have deducted his tax, and then offset it against the tax deducted by the builder.

 

[betty swollocks]

whats tax?

 

[Lee321]

whats tax?

ROTFWL

its a bane that some of us have to endure

 

[jl-heating]

it is a pain but the only way i pay twice but get it back at the end of the year which is nice,

the other way is go for gross payments were you dont pay tax till year end but you still pay ur m8`s cis monthly.

 

[Evans Electric]

I never do that. just pay the mate the net and on your monthly returns declare zero. its legit i checked it with hmrc. its zero because the tax has already been paid.imagine if you had 12 sparks and mates either you'd brunt the double tax or they would and they more than likely won't stand for it or even worse work but take the ****.

its an unworkable method.

I take your point , Lostit , but I was told I couldn't pay anyone without deducting tax. How does your mate prove that the tax has been stopped when his return goes in ??

I checked with HMRC and was told I am a sub-contractor to the builder and a main contractor to anyone working for me, but , as I said , builder only deducts my tax.

The 714 system seemed to be better than this nonsense !! Don't you think ?

Deke

 

[Lee321]

I take your point , Lostit , but I was told I couldn't pay anyone without deducting tax. How does your mate prove that the tax has been stopped when his return goes in ?? I checked with HMRC and was told I am a sub-contractor to the builder and a main contractor to anyone working for me, but , as I said , builder only deducts my tax.

The 714 system seemed to be better than this nonsense !! Don't you think ?

Deke

first off the simple way is if your continually using a mate then apply for gross payment status (old 715)

its easy to work as it is tho still: the builder provides you with pay advice which you use as proof of deduction. so you do the same with your subby :Y

 

[jl-heating]

for 715 you have to prove 30k turnover in 1 year, by bank statements or other etc

 

[Lee321]

for 715 you have to prove 30k turnover in 1 year, by bank statements or other etc

could be more now but yes thats the jist of it.

 

[jl-heating]

deffo 30 k ..

but if you do 3 late returns in one year they take gross off you and put u back on net .

 

[Lee321]

deffo 30 k .. but if you do 3 late returns in one year they take gross off you and put u back on net .

it was 200k for us

 

[jl-heating]

are u limited ??

a sole trader like me i was asked for proof of 30k

 

[Lee321]

are u limited ?? a sole trader like me i was asked for proof of 30k

yes limited

you can also show 3mths and a projection if you have set up and are off to a flying start for those that don't know

 

[Lee321]

use this deke for your subbies. hmrc compiled too so they cannot say you have missed any required information

.

http://www.hmrc.gov.uk/forms/cis-payment-deduction-statement.pdf