Self employed problem with the taxes - Tax problems with contractor

[Pablo]

You must be a limited company then Tony are you I'm still a sole trader but have thought more and more about going ltd I'll do it within the year I reckon.

[DNgroundworks]

Jimmy car?

[GB_Groundworks]

for my dads ltd construction company all the subbies get deducted 20% at source by us, this is paid monthly to the hmrc, every april certificates are issued to contrators and accountants stating the gross paid and the tax paid. you get fined £100 a month for non submissions of your deductions and utrs, even if you are not employing for a few months.

we have a few gross payment firms like our surfacing lads etc

for me as gb groundworks i get paid the gross amount on everything but labour only jobs which when done for a CIS contractor gets 20% taken off and a certificate issued.this does get complicated when you are supplying 3 lads etc. although some contractors even when told you are registered for gross payment still ask for the labor element then task that.

your mate needs his certificates if not sounds like hes being done for 20% by the middleman

[GB_Groundworks]

Jimmy car?

hes involved in a tax reduction scheme called k2

he is employed by a jersey based company who charge ppl for his services then they "lend" the money back to him, as its a loan and can technicially be recalled at anypoint there is no tax so effectively he can pay as little as 1% income tax.

the example they used on radio was a guy earning 280k should be paying 118K in tax but through this scheme would only pay £3k.

obviously the firm takes a cut for this but no where near the tax, its legal just.

of course everyone here as always been honest on their tax return haha.

[lutonlagerlout]

well i am a director of a limited company pablo
pretty much works same as giles
if i say to carl who is a roofer "got 3 weeks work for you"
then we stop him 20%
but if i say to lewis who owns a roofing company" can you price this roof?" he will want the gross payment upon him invoicing us
the digger man and grab man both invoice us and receive the total amount plus VAT
but if we hired a digger in then the driver would get stopped
it sounds more complicated than it is
the main thing to watch is that some sneaky subbie doesnt run off with all your tax money
I know lads that it has happened to and it isnt nice
LLL

[ilovesettsonmondays]

i havent had a cis voucher in the last two years had payslips and lost most of them . i just check my bank online and add up my net pay and give it to accountant. got rebate yesterday funny enough.this year i have started correct envelope for every month ,receipts and payslips into them.

[DNgroundworks]

Just had an hour with accountant today, instigated by pablos's post, the rules are you need a minimum of 30k gross profit per annum, a squeaky clean payment record with HMRC and operate out of a uk business account, all of which i meet so i have applied for gross payment status, hopefully my application will get accepted.

Cant wait for no more 20% deductions, fingers crossed!

Also finally regsitered for VAT today, cant be arsed battling with that any more, it makes doing business awkward with other vat'd firms, so the bullet has been bitten so to speak

[rimexboy]

sorry just going through some old post

We managed to get this sorted we went the court papers was and after we served them and waited for the 28 days my mate gave him before lodging the papers with the court he paid up in full

thanks everyone for your help

thanks simon